Chennai-based commercial vehicle manufacturer Ashok
Leyland Limited and Finland''s €130-million turnover
Alteams group have teamed up together to make high pressure
die casting (HPDC) aluminium products for automobile and
two have formed a 50:50 joint venture for this purpose
and the plant will be located near Chennai. During the
first phase to be completed by 2008 the yet to be named
joint venture company would invest around Rs175 crore.
The debt: equity for the project will be 1:1 and the partners
will bring in equal amount towards the project cost.
JV reflects the expansion of Ashok Leyland Group''s presence
in the auto components sector to take advantage of rapidly
growing opportunities both in India and abroad,"
said R Seshasayee, managing director, Ashok Leyland.
R Seshasayee, the total investment into the project at
the end of second phase around 2013 would be around Rs335
crore and the company''s turnover would be around Rs650
crore. The venture is expected to generate direct and
indirect employment opportunity for 1,000 people.
manufacturing facility in Phase I has been planned in
Tamil Nadu and the JV will produce components for the
telecommunications sector such as those fitted in the
transmission and receiving equipment. It will also partly
meet Ashok Leyland''s own captive requirements for components
for engines and gearboxes.
Phase II, the joint venture will enhance its product portfolio
with HPDC components for automotive sectors including
passenger cars and for non-automotive applications as
well. The target markets will extend beyond India.
through the HPDC technology are increasingly being favoured
thanks to their high quality, capability for complex geometry
and weight efficiency as also economy at higher volumes
in the telecommunications and automotive sectors, which
have emerged high growth areas in the past few years.
said the joint venture company would start commercial
operations soon as Alteams has already booked orders from
telecom equipment makers like Nokia Siemens Networks.
The components will be fitted in transmission and receiving
auto components made by the new company will initially
consumed by Ashok Leyland. Later we will look at other
customers," Seshasayee added.
the reason for Ashok Leyland getting into a joint venture
when it already had Ennore Foundries Limited, a casting
subsidiary, he said Ennore Foundries was in to grey castings
and was tied up with its expansion programme. Moreover,
the group felt aluminium die casting had good potential
and decided to venture into the project. "The new
venture is not a division of Ashok Leyland. It is a separate
entity. And nothing stops Ennore Foundries from getting
into aluminium die casting," Seshasayee said.
the new company will import the telecom components from
Alteams'' Chinese plant and assemble the same in leased
premises. "We are on the look out for 25-30 acre
plot to set up a full fledged plant."
to Alteams Group CEO Panu Routila, the group''s auto component
business is small. Partnering with Ashok Leyland gives
us an opportunity to grow this business in a big way.
about Ashok Leyland''s plans for a one-tonne truck Seshasayee
said, "We are looking at that segment."