Challenge faced: Precision Industry, Succession Planning is an Issue, Depleting sales and capacity utilization, Working Capital not under control, Cash-flow is under stress
Our Company is a crankshaft manufacturing unit. With one of the largest suppliers (read – ‘Amtek Auto’) going down the business, the supply position has been under stress. Mindstone looked for a Company in this domain. With one of our esteemed partner companies, we picked up stake in a crankshaft manufacturing facility with a monthly production capacity of ~4,000 crankshafts. Because of constraints in management, the Company has been experiencing fast depleting sales, while being in precision industry working capital remained high because of the need of skilled manpower in the Industry. Prior to our Management taking over, the Company has bottomed to the sales level of ~800 crankshafts a month. In 9 months of our active support, as on the date of this writing, the Company is touching continually sales of more than 3,500 crankshaft a month. In the same period, working capital was optimized, corporate governance was re-enforced, production capacity got augmented to 6,200 crankshaft a month, the order book was built with a strong relationship with our large sized automobile manufacturing buyer companies. Version 1 of the intervention stands completed with the well-controlled production facility, control over inventory built-up, diversification of product suits, and good control over working capital with lower rate of interest on debt capital.
As part of Version 2.0 of the Company, management team now plans to augment the capacity to a level of ~21,000 crankshaft a month with a backward integration in the form of forging facility for primarily captive use. The idea is to take the Company’s EBITDA level to a very comfortable level, thereby, infusing renewed confidence and placing the Company as a major supplier to the renowned automobile suppliers in the Country.