The
Tata group is likely to finalise plans for
a world-class global research and development
(R&D) centre in the UK shortly.
The global R&D hub,
will encompass R&D activities of Tata
Motors, TCS, INCAT, Corus, and Tata Chemicals
and now
Jaguar Land Rover among others.
At
present, the Tata Motors European Technical
Centre, which was involved in designing the
Nano, is based in Warwick University, but
the plan is to move the operation to a base
that can accommodate all group companies,
with world class facilities to service various
sectors.
The European Technical Centre
is focussed on automotive
design and research, but it is expected that
group companies like Corus, TCS
and others will bring their own R&D divisions
together under one roof. Details of the total
investment and exact location are expected
to be finalised in a few months.
The idea is that the global
R&D centre will leverage synergies across
group companies, and emerge as a major global
research powerhouse.
The Tatas had zeroed in on
Anstey, Coventry, in West Midlands as a likely
location, but are rethinking the location
after its recent acquisition of Jaguar Land
Rover, which is also located in the area.
JLR also has its own automotive design and
engineering research centre in UK, which is
credited with doing much of the work on the
recently launched Jaguar XF.
The earlier location was chosen
on the basis of monetary and developmental
incentives and sops given by the local authorities
to encourage inward investment. Now that the
Tatas have acquired JLR’s facilities,
it might relocate its R&D hub within the
new premises.
While the technical centre
will retain its strong links with Warwick
University and Warwick Manufacturing Group,
the group has felt the need to invest in a
larger and more consolidated research facility
for sometime.
Companies lie TCS and
Corus already have regular research centres
and global centres of excellence in the UK,
so it is likely the new hub will focus more
high-end innovation and basic research.
M &M set to buy
Belgian gear-maker for $475 mn
Auto
major Mahindra & Mahindra (M&M) is
understood to be in an advanced stage of negotiation
to acquire Belgium gear-maker VCST. The deal
size could be in the range of around euro
300 million ($475 million or Rs 1,900 cr),
sources said.
The Indian auto major is doing
a negotiated deal with the company. When contacted,
Hemant Luthra, president of the automotive
component division of M&M, Mahindra Systech,
refused to comment.
The deal will be part of M&M’s
strategy to increase its footprint and share
of the gear market, particularly in Europe.
The company, through its component arm Systech,
is working on the European acquisition and
strategic partnership simultaneously to take
its share of the gear market in Europe to
around 40% and business worth Rs 2,500 crore.
Through Systech, M&M is
targeting a turnover of $1 billion by 2010
from automotive component and related businesses.
Its current turnover is around $800 million.
VCST, which designs and manufactures
gears, gear sets and shafts for automotive
engines and brakes, already has a presence
in India.
It formed a 50:50 joint venture with Amtek
Auto. VCST employs around 1,000 people and
operates five manufacturing facilities in
three locations: Sint Truiden, Belgium, Reichenbach,
Germany, and Detroit, Michigan.
Other domestic component majors
and some PE funds have backed out of the transaction
citing higher valuations and tight credit
conditions in the
loan market. Sources close to
the deal indicated that acquisition will be
concluded in the next few weeks.
According to sources, for
the past few weeks, the company has been scouting
around for acquisition financing. With the
credit market in a turmoil because of the
subprime issue, the company is likely to go
in for a bridge loan for around a year.
Post the subprime crisis,
many component firms across Europe are finding
it difficult to get buyers. In recent times,
interest from PE firms in taking over companies
has gone down due to the tight credit conditions
in the market.
If the sale goes through,
this would be the fourth time in seven years
that VCST has been sold. The company was earlier
sold by San Francisco-based private equity
firm Fox Paine to Alpha Fund and the management
for 250 million euros at the end of 2005.
The company has also been owned by Navas Investments,
Royal Begemann group and Volvo Car.
European private equity fund,
Alpha, and the investment
company HarbourVest Partners
currently own 95% in VCST. Although VCST is
a profitable company and margins have consistently
improved over the last few years, the Belgium
gear maker has been finding it difficult to
generate cash
for capital expenditure, sources said.
Sources also indicate
that Alpha wants to exit its investments in
VCST. They pointed out that the private equity
firm is more keen for strategic buyers/manufacturers
instead of private equity players. VCST is
said to have sales of euro 154 million.
German company to
setup heavy truck manufacturing plant in Pune
German automotive supplier ZF Friedrichshafen
today said it would be investing Euros 20
million in setting up a manufacturing plant
in Pune, Maharashtra.
"The plant would make
commercial vehicle transmissions for heavy
trucks and agriculture and construction components
for the domestic market," ZF Board Member
Wolfgang Vogal told reporters.
The plant would be commissioned
by the middle of 2009 and the company is in
the "process of acquiring land"
in Pune. ZF has many clients in India.
They include Telcon, JCB India, BEML, Schwing
Stetter, Greaves Cotton, Ashok Leyland, Asia
MotorWorks and Force Man. These clients were
supplied ZF products imported from Germany.
"The growth in the Indian auto market
has forced us to have a plant for the Indian
market," Vogal said.
ZF has been operating in India
for 25 years supplying steering components,
chassis and suspension parts. Globally, the
group's turnover in 2007 was Euros 16 million.
ZF products are available in 26 countries.
Atlas Copco acquires
holding in Indian drilling technology Co
Atlas Copco (India)
limited has acquired 25 per cent of Focus
Rocbit Pvt Limited and Prisma Roctools Private
Limited in India.
An agreement to acquire 25
per cent share was signed between Mike Mustapha,
Managing Director of Atlas Copco (India) Limited
and Ujjwal Muzumder, Managing Director of
Focus Rocbit and Director Prisma Roctools
Private Limited.
Focus Rocbit Pvt Ltd, a manufacturer of bits
for rotary drilling and Prisma Roctools Pvt
Limited makes bits and hammers for down-the-hole
drilling.
The privately-owned companies, which largely
have the same shareholders have combined annual
revenues of about ten MUSD and 114 employees.
Sales are mainly in India, Australia, South
Africa and United States.
Addressing jointly mediapersons here today
Mustapha said that "we aim to enter new
markets and compete and strengthen the position".
"The acquisitions add a competitive range
of products for customers in India and selected
markets. They will also allow us to further
develop and grow our rock drilling business
in order to benefit from the current growth
in the mining, construction and water well
sectors," Mustapha said.
The businesses will operate as joint ventures
within Atlas Copco's Secoroc division. Atlas
Copco has an option to acquire the remaining
shares in both companies.
US firm launches new
bearings manufacturing plant in India
Eyeing the growing Indian
mining, energy and heavy industries,
US-based bearings maker Timken on Wednesday
announced the launch of its new bearing manufacturing
plant at Mahindra World City Special Economic
Zone (SEZ) here.
Timken President and Chief
Executive Officer James W Griffith told newspersons
that the economic boom and rapid infrastructure
development in the region had prompted the
company to establish, Timken India Manufacturing
Private Limited, at a cost of US Dollar 25
million.
The company,which concentrated
on friction management and energy saving products,
would mainly cater to the global demands.
With the completion of phase-I manufacturing
line by October 2008, the production is expected
to touch 3,10,000 bearings annually, he said
adding it would touch 4,20,000 bearings under
the Phase-II, expected to be completed by
2009.
Timken-India Managing Director
Gordon Robinson said the company was focusing
on Indian automotive sector, particularly
the truck industry to boost the sales.
The Timken Technology
Centre in Bangalore would take up more research
and development activities to bring the latest
technological advancements to the Indian customers.
