The specialist manufacturing company APEC Kolath is located in a village 80 km from Chennai, the largest automotive hub in India. They supply a range of specialised electronic assemblies (electronics components housed in moulded plastic cases) to automotive and industrial sectors. They were acquired by Lucky MT in 2021 and now operate as an overseas subsidiary of the Singaporean company.
APEC Kolath was established in 2012 as a plastic mouldings manufacturer, initially supplying Tata Motors Ltd. Their expertise in moulding metal components into plastic casings led to the company rapidly expanding production after gaining contracts from European automotive component manufacturers including Plastic Omnium, Magna, Faurecia and Erfde Automotive. Erfde Automotive took this opportunity to establish an overseas manufacturing plant in Chennai to take advantage of the lower-cost economy in India.
Before the Lucky MT acquisition, Erfde Automotive worked closely with APEC Kolath to develop a cost-efficient moulding process that allowed electronics components to be moulded into their housings rather that assembled post-production. This new technology was perceived to offer a significant market advantage, and by 2016 Erfde Automotive had sourced over 70% of their under bonnet and facia electronics assemblies supplied to European automotive customers such as Groupe Renault, BMW AG and Volkswagen AG with APEC Kolath.
In January 2017 APEC Kolath received a $300,000 fine after 1000 litres of oil escaped from a damaged oil tank and polluted 40 km of river system and 4 local lakes and seriously affected the water supply of 6 villages. The court case brought by the Tamil Nadu Water Supply and Drainage Board received extensive negative publicity both locally and nationally.
Although Erfde Automotive continued to source components and assemblies from APEC Kolath when these social and environmental concerns came to light, several large customers such as Toyoda Gosei and Gestamp withdrew their business, and others such as Denso and Benteler reduced contracts so that in August 2018 the banks declared APEC Kolath bankrupt. To protect component supplies Erfde Automotive purchased APEC Kolath and continued to run the business as a subsidiary.
By early 2019 Erfde Automotive’s management team became aware of more extensive environmental and social issues in APEC Kolath, which were threatening to damage Erfde’s corporate reputation in Europe. They took the decision to remove the specialised moulding technology equipment to a new location and sell what remained of APEC Kolath. However, selling APEC Kolath in a way which protected ownership of, and expertise in, the moulding / electronics technology and enabled the company to maintain component supplies to Erfde’s operations in both Chennai and Europe, proved impossible.
Instead Erfde Automotive identified an opportunity to link the continued operation of APEC Kolath with a supply contract for new under bonnet electronic sensors sensors. Erfde Automotive considered it viable to transfer the ownership of APEC Kolath to an electronics manufacturer who would supply sensors to be moulded into housings in India and shipped to Erfde Automotive for onward sale to their longstanding automotive customers including Johnson Controls, McKechnie and Delphi. This reduced Erfde Automotive’s liability for sustainability performance, protected their reputation and guaranteed them access to the moulding technology which provided them market advantage. Lucky MT was selected as this partner. In March 2021 the ownership of APEC Kolath was transferred to Lucky MT.