Ashok Leyland JV with Alteams, Finland

Ashok Leyland Ltd has announced that the Company has entered into a joint venture with the Alteams Group, Finland to manufacture High Pressure Die Casting (HPDC) aluminum products predominantly for the automotive and telecommunications sectors, subject to various corporate and statutory approvals as may be required.

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.

"Apart from a fusion of the respective strengthen of both the partners, the 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 Mr. R Seshasayee, Managing Director of the Company. "We are already present in the foundry business through Ennore Foundries. This JV broadens our portfolio to meet the demand of castings from the automotive and telecommunications sectors," he added.

The JV will commence activities in 2007 and Phase I will be completed by 2008 at an investment of over Rs 1.75 billion. At the completion of Phase II in about 5-6 years which will overlay and extend beyond Phase I, the JV will achieve a turnover of Rs 6.5 billion with a total investment of Rs 3.35 billon and will generate employment, directly and indirectly, in excess of 1,000.

The JV is well-placed to benefit from the robust growth in both the telecommunications and automotive sectors. Components 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.

The 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 the Company's captive requirements for components for engines and gearboxes. In Phase II, the JV 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.

Source : Equity Bulls

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