SONA SOMIC LEMFORDER COMPONENTS LIMITEDThe company was initially set up as Sona Somic Components Limited in the year 1995, a joint venture with Somic Ishikawa of Japan. In 1998, Lemforder Metallwaren picked up an equity stake in this company and the company became sona_somic_Lemforder Components Limited (SSL). This tie-up has expanded the footprint of this company as it can now caters to both the Japanese as well as the European markets.SSL is a leading manufacturer of ball joints for steering systems and suspension components in the country. Its products are used in passenger cars, jeeps and light commercial vehicles. The company's major customers are Sona Koyo Steering, Maruti -Suzuki, Honda, Toyota and M&M .The SSL plant has the latest state-of-the-art equipment and its production method is based on the lean production system known as 'Toyota Production System' (TPS), learnt from its Japanese partner. Highly effective elements of TPS, like Just-In-Time, Kaizen, one piece at a time and Participative Management are being utilized to maximise effectiveness and efficiency. The company is using a combination of the latest technology along with a well-planned, well-executed production system to manufacture products of the highest quality for existing customers as well as to target other major entrants in the automotive sector.

Plant DetailsPlant Location : 22 Km. from Delhi AirportTotal Site Area : 16255 sq.m.Covered Area : 8186 sq.m.Capacity : 7.5 million ball joints / annum

ICRA has assigned LBBB (pronounced L triple B) rating to the Rs. 103.5 million cash credit facilities and Rs. 418.3 million long term loans of Sona Somic Lemforder Components Limited (SSL). ICRA has also assigned A3+ (pronounced A three plus) rating to the Rs. 10 million non-fund based short term facilities of SSL. LBBB is the moderate-credit-quality* rating assigned by ICRA to long term debt instruments. A3 is the moderatecredit- quality* rating assigned by ICRA to short term debt instruments. The rating favorably considers SSLs established market position as a leading supplier of Steering Ball Joints and Suspension Arms to domestic automobile manufacturers and tier-1 suppliers, and access to technology from its collaborators for product design and development. SSL is the sole supplier of Steering Ball Joints to Sona Koyo Steering Systems Limited (SKSSL), the leading steering systems manufacturer in the domestic market; besides being the leading supplier of Front Suspension Arms and Suspension Links to several domestic Original Equipment Manufacturers(OEMs) like Maruti Suzuki India Limited (MSIL), Tata Motors Limited (TML), General Motors India (GMI), Toyota Kirloskar Motors Limited (TKML) etc. SSL benefits from the technology support gained from its collaborators Somic Ishikawa (Japan) and ZF Lemforder GmbH (Germany) - who also hold equity stake in the company - allowing SSL access to new businesses from various Japanese/ European OEMs in India owing to the collaborators strong international linkages. However, the rating is constrained by SSLs moderate scale of operations, its ability to pass on increased raw material prices to customers, significant debt-funded capital expenditure, besides the current slowdown in the automobile industry.

SSLs profitability was impacted during 9m 2008-09 on account of an increase in raw material prices especially during H1 2007-08 and hardening of the Yen against the Rupee which could not be passed on to the customers fully. Further, the significant capital expenditure undertaken over the last two years is likely to keep the companys RoCE, leverage and debt coverage indicators under strain over the medium term in view of the demand slowdown in the economy. However, SSLs increased focus towards the replacement market is expected to partially mitigate any possible slowdown in its existing business with various OEMs and Tier-1 suppliers. Recent Results: During 9m 2008-09, SSLs Net Sales at Rs. 837.9 million reported a growth of 20% over the corresponding previous period. The companys profit before depreciation, interest and tax at Rs. 69.8 million reported a growth of 3% in 9m 2008- 09 over the corresponding previous period. SSLs profit after tax (PAT) decreased from Rs. 16.3 million in 9m 2007-08 to Rs. 1.4 million in 9m 2008-09. About the Company: Sona Somic Lemforder Components Limited (SSL) is a manufacturer of Ball Joints for steering systems and Suspension Arms and Suspension Links mainly for passenger vehicles. SSL was incorporated in 1995 as Sona Somic Components Limited (SSCL), as a joint venture between SKSSL and Somic Ishikawa Inc., Japan. In 1998, ZF Lemforder Metallwaren AG, Germany joined in as the third joint venture partner and the company became Sona Somic Lemforder Components Limited (SSL). Currently, SSLs shareholding is distributed between Sona Investments Private Limited (36%), Somic Engineering Inc. (36%) and ZF Lemforder GmbH (29%). With three manufacturing facilities located at Gurgaon, Rudrapur and Chennai, the companys customer portfolio comprises of Sona Koyo Steering Systems Limited (SKSSL), Maruti Suzuki India Limited, Tata Motors Limited, Toyota Kirloskar, Ford India, Mahindra &Mahindra, and Honda Siel Cars India Limited etc.