Tuesday, Ashok Leyland Ltd announced that the company has signed a 50:50 joint venture agreement with Finland-based Alteams Group, to manufacture high-pressure die casing aluminium products for use predominantly in automotive and telecommunications sectors.
The 50:50 JV will synergize the company's experience and expertise in the automotive sector with Alteams' Know-how of HPDC and their insights into telecommunications sector.
The chennai-based company said that the joint venture would commence its activities in 2007 and the first phase of the project would be completed by 2008 at an investment of over Rs. 1.75 billion. After completing the Phase II in around 5-6 years, which will overlay and extend beyond Phase I, the JV will be able to achieve a turnover of Rs. 6.5 billion with a total investment of Rs. 3.35 billion. The joint venture company will provide employment, directly and indirectly, for more than 1,000 persons.
The company disclosed that the Phase I of manufacturing facility has been planned in Tamil Nadu and the JV will manufacture components for the telecommunications sector such as those fitted in the transmission and receiving equipment. It would also partly meet the company's captive requirements for components for engines and gearboxes.
In Phase II, the JV will augment it s products portfolio with HPDC components for automotive sectors including passenger cars and for non-automotive applications as well and the target markets will extend beyond India, Ashok Leyland said.
About Alteams Group
Alteams Group's core business is manufacturing of cast light metal components including related services like design of castings and tooling as well as further processing into assembly-ready components. The Alteams Group has production units in Finland, Sweden, Russia, Estonia and China, with sales offices in Denmark, France and the USA.
About Ashok Leyland
Ashok Leyland Ltd, the flagship of the Hinduja Group in India, is a commercial vehicle manufacturing company based in Chennai. The company employs around 5,000 people working in six factories spread over the length and breadth of India.
The company clocked a net profit of Rs. 441 crores on total income of Rs. 7,239 crores for the fiscal year ended March 31, 2007.
Stock movement
At the NSE, Ashok Leyland closed Tuesday's trading at Rs. 37.95, up 0.66% on volume of 34.28 lakh shares.
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