HMT Group Sets Bearing Sales Target

HMT Group Sets Bearing Sales Target Hindustan Machine Tools Group Ltd. (HMT, India) announced it has set a 24% overall sales growth target for fiscal 2008, covering April 2007 through May 2008. HMT is under a long-term, government-funded turnaround effort. Seven companies make up HMT Group, but only two -- HMT Bearings and Praga Tools -- are believed to show any real potential for long term survival, absent government-funded support. They are all operating under control of the Board of Reconstruction for Private Sector Enterprises (BRPSE). For 2007-2008, HMT Bearings Ltd., located in Hyderabad, was given a sales target of Rs 500 million (USD $11 million). As a sharp jump up from current sales, the target seems unattainable. However, the government has reassured raw material and component parts vendors it will infuse the necessary cash to keep HMT Bearings solvent. The company has consistently said there is sufficient customer demand to push sales far higher, but only if it is able to overcome chronic materials and parts shortages resulting from cash flow shortages and the inability to keep up with payments to its vendors. HMT Bearings manufactures ball bearings, tapered roller bearings, and cylindrical roller bearings in sizes from 20mm to 260mm OD. The division expects to report fiscal 2006 sales in the neighborhood of Rs 400 million to Rs 450 million, ($9 million to $10 million) but says it still lacks sufficient operating capital to continue without guaranteed government funding. Overseen by the Board for Reconstruction of Public Sector Enterprises, HMT Bearings' revitalization plan has just recently been approved by the Indian Cabinet Committee on Economic Affairs and funded with Rs 520 million (USD $11.5 million) -- Rs 170 million for CapEx and Rs 100 million for working capital.