Mahindra Sintered: a win-win alliance

Usha Somayaji
28 March 2001

In an interesting alliance that does not involve any payments, Mahindra Sintered Products (MSP), the joint venture between the Mahindra Group and the UK-based GKN, has entered into a tie-up with MicroMet of Germany to put up an atomised copper powder project at Ahmednagar in central Maharashtra. MicroMet is the high- technology subsidiary of Europe-based Norddeutsche Affinerie.

Under the deal MicroMet will give MSP its technology free, for the latter acceding marketing rights, both within India and outside to MicroMet. That is, after Mahindra Sintered keeps whatever amount of copper powder it wants, for its own internal consumption.

This unique deal has arisen from MSP’s need for a new technology that would have meant putting up a high capacity plant for it to be viable. Thus, while the minimum capacity for an atomised copper powder plant was 2,000 tons per annum (tpa), MSP''s requirement was only for 600-700 tpa annually, and it had no intention of getting into the business of marketing copper powder. Hence the unique deal with Micro Met.

MicroMet, which makes 5,200 tpa copper powder at its plant in Hamburg, Germany, selling mainly to the European and US markets, was looking to expand its operations in Japan, Korea, and the Far East. In order to stay closer to the new markets, MicroMet had been contemplating setting up a unit in this part of the world, the options being China, Korea, Malaysia, or India. Hence, with the alliance with MSP, MicroMet got the product without the cost of investing in the project.

MSP has put up a 2,400 tpa atomisation plant, investing Rs 4.5 crores. It has been able to keep the investment low through using existing facilities and indigenous equipment wherever possible, keeping investment to the minimum. "If MicroMet had to put up such a green-field plant it would have cost them at least five times the amount in this part of the world, and about ten times in Germany," points out Brij Kataria, managing director of MSP.

What also helped MSP was its ability to absorb the technology easily based on its ealier experience with an atomising unit for iron powder, which it sold to Hoganas, in 1992.