BEML Forms JV for Assembly Plant in Brazil

Bharat Earth Movers Ltd (BEML) has announced that the Company has signed a Memorandum of Understanding for establishing a Joint Venture (JV) Company with CCC (Compagnie Comercio E Construcoes) for manufacture and supply of rail wagons & bogies, mining & construction equipment and spares. The MoU to this effect was signed by the visiting Company's Chairman & Managing Director Mr. V RS Natarajan with CCC Proprietor Mr. Darci Rodrigues in the presence of Hon'ble Prime Minister of India Dr. Manmohan Singh and Hon'ble President of Brazil Mr. Luiz Inacio Lula Da Silva at the Presidential Palace in Brasilia, capital of Brazil, on September 12, 2006.

With the objective of manufacturing the entire range of mining & construction equipments and spares, the Company has finalized plans to form the joint venture with 60 percent share of the Company and 40 percent share of CCC Brazil. For this new venture, the Company is committed to invest Rs 100 crores by taking over a factory on the outskirts of Rio-de-Janeiro city in Brazil. The factory has facilities and adequate infrastructure to take up manufacturing equipment in the near future with a capacity of rolling out 500 wagons and over 200 earthmoving equipments and spares annually. Given the growing demand in the Brazilian market as well as other South American countries in terms of expansion of mines and offtake of wagons, this joint venture shall help the Company penetrate info new market overseas. This step shall also help the Company to consolidate its leadership position in construction & mining machines and railway products in the mineral-rich territory of Brazil which is the largest country in South America and is poised for a big impetus in development of rail / road logistics in the Latin American region.

Source : Equity Bulls

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