Updated: Feb 22
UFI Filters, one of the world's best-known automotive filtration systems suppliers with a presence in India since 2008, today inaugurated its third manufacturing facility in the Bahadurgarh industrial district of Haryana, on the outskirts of New Delhi. This facility is also the company's first dedicated to the aftermarket plant in the world.
The company, which specialises in fuel filters (primarily diesel) and oil filters for passenger vehicles and commercial vehicles under its UFI (OES) and Sofima (aftermarket) brands, has two other plants – in Bawal (Haryana) and Belgaum (Karnataka). While the 8-million units per annum capacity Bawal plant supplies to Maruti Suzuki, Hyundai Motor India, Tata Motors, Daimler and Ashok Leyland as well as the aftermarket, Belgaum (1.5 million units) is reserved specifically for exports to the European market with made-in-India parts reaching carmakers of the likes of General Motors, Fiat and Porsche.
UFI Filters’ aftermarket presence under the 'Sofima' brand stands at about 7 percent in the organised aftermarket space in India. The company's bullishness on the Indian market stems from the double-digit growth it has been registering in the aftermarket business over the past four years, and has led to it setting up a brand-new plant specifically for the aftermarket.
The new plant, under Sofima Filters India, will now augment existing capacity and enhance its ability to cater to growing demand in the aftermarket. The Bahadurgarh plant, spread over 4,500 square metres, sees an investment of Rs 10 crore in equipment and construction. It will produce 6 million units over two shifts and can reach up to 8 million on a three-shift basis. The aim is to strengthen the hold on the market to 10 percent by FY2022.
New plant to cater to Maruti Suzuki and Tata Motors The new plant will produce air filter elements for passenger cars for Maruti Suzuki and Tata Motors as well as cabin air filter cartridges for models such as the Maruti Dzire. While production will commence in November in a single-shift operation with two assembly lines, the company will scale up to two shifts by the first quarter of FY2021. Initially, up to 250,000 cabin filters and around 300,000 air filters will be produced every month. While major production is intended for local consumption, the company will gradually start exportibng to neighbouring markets by the start of next fiscal.
According to Luca Betti, director, Group Aftermarket Business Unit, UFI Filters, "This is a big milestone for us as we set up our first ever aftermarket-specific plant anywhere in the world. Our customers have a growing demand for reliable products and we are glad that we can cater to such needs with our focus on technology and quality."
"We have been recording double-digit growth YoY since 2015 in our aftermarket business globally and thus have been focusing more on this segment over the last five years," he added. The Group's aftermarket revenues stood at 100 million euros (Rs 782 crore) last year and it expects to continue growing at the same pace over the next five years as well.
While it targets Rs 50 crore in revenue from its domestic aftermarket business in FY2020, the target is to double the number to Rs 100 crore by FY2024. Its current distribution network includes 160 dealers across the country.
According to Hridesh Sharma, CEO, UFI Filters India, "Since the last five years, we have been focusing a lot on the aftermarket space. Unlike smaller players, our intent is to provide the highest standards of quality."
BS VI impact drives shift to CNG filters for key client With UFI Filters India being a key player in diesel fuel filtration technology and Maruti Suzuki accounting for a chunk of its supplies (OEM and OES), the company has already been impacted by the slowdown – volumes are down 30 percent. And with the country's leading carmaker having confirmed plans to stop making diesel-engined cars from April 2020, the company is taking rearguard action.
As a result, while UFI will see a lot of its production capacity at Bawal lying unutilised, it is also working to diversify itself into new areas such as getting into supplying CNG filters to Maruti Suzuki, for which it has submitted its design proposals and is expecting RFQs.
Also, with diesel still continuing to remain a key propulsion technology in the CV space, "the biggest bet for a filtration player now is the heavy-duty segment," said Sharma.
Through its technical centre located in Aerocity, Gurgaon, UFI Filters India is also conducting continuous research for which it has developed innovative solutions for BS VI fuel filtration, and also aims to diversify into thermal management systems for battery cooling in EVs. The company targets to put itself in such a position that as and when EV technology grows and there's also a spurt in the sale of electrified vehicles, it will be able to scale up and cater to the market demand with ease.
The simulation centre sees 32 engineers conducting design and simulation work on various new products both for India and for supporting the Group's European operations. Some of the innovations UFI has in its stride are urethane air filters which are highly flexible in their shape and design, and multi-tube filters.