"We will form a joint venture for setting up a plant for manufacturing aluminium alloy, used in automotive sector, at Bawal in Haryana with Rs 50 crore investment," NMA's President Shuzou Hammamura said.
A 55:45 joint venture between Nippon Light Metal Co and Mitsubishi Corporation, NMA is the second largest aluminium alloy maker of Japan. It had clocked $600 million turnover last year. NMA has eight plants including three outside Japan with a total capacity of 2.4 lakh tonnes a year.
Aluminium alloys, made adding zinc, silicon and manganese among others with the mother metal, is being increasingly used in the automotive space to reduce car body weight and increase fuel efficiency.
Hammamura said work on the proposed Haryana plant would start soon. It would go on stream by the end of the current year. The facility, with 42,000 tonnes a year capacity, would cater to the automobile companies in the vicinity.
Bawal is in the neighbourhood of the Manesar-Gurgaon belt which has a large concentration of automotive firms, including Maruti and Honda.
Asked about the future plan of the joint venture, he said nothing has been decided yet, but it might look at putting up plants in other parts of India. CMR will hold 74% in the joint venture and the rest will be with Nikkei, he added.
CMR, which claims to be the No. 1 firm in India in the aluminium alloy making space, has four plants and had clocked Rs 1,000 crore revenue last year.
The NMA and CMR joint venture would import aluminium scrap from overseas to use as raw material for making alloys.
CMR Chairman G S Agarwala said every year India consumes around five lakh tonnes of aluminium alloy, valued at Rs 7,500 crore, and the market has been growing by 15-20% each year.