Polyhose Group, which has been manufacturing hoses for both the Indian and export markets, has acquired the construction equipment manufacturing facility of the Ashok Leyland-John Deere, joint venture, to foray into this segment.
John Deere is a US-based construction equipment major.
The group has a decade-long joint venture
with Caterpillar Inc, in Polyhose India (Rubber), apart from some of the Japanese investments in the group companies.
The new business would start manufacturing allied products in three to six months, while it would start manufacturing construction equipment in less than a year, said Suryanarayanan, chief financial officer of the company.
He refused to reveal the cost of acquisition of the facility but said that the Group will invest a total of Rs 100-120 crore into the new business. The investment would be from internal accruals and debt, he said.
The Rs 700 crore company is in talks with the dealers and has plans to check with its partner Caterpillar for possible support in the sector, he added.
has mentioned earlier that it had disposed the shares in Ashok Leyland John Deere
at a loss of Rs 233 crore. The JV
company has reported a loss of Rs 75.9 crore in 2015-16 as against Rs 29.6 crore a year before. AL attributed the poor performance to market conditions.
The vehicle manufacturers formed the JV
in 2008 and launched its first product, a Backhoe Loader in November 2011, thereby entering the Indian construction equipment space. The facility has a capacity to manufacture 16 equipment in two shifts a day, and the company would start using it to manufacture two to four a day in the initial phase, said Suryanarayanan.