Danke group to form JV for construction equipment biz

The group will also bring in a foreign partner for its upcoming venture in the space. Also, in a bid to consolidate its business, Danke group is also in the process of merging its subsidiaries.

After having established a strong presence in manufacturing of transformers, disconnectors, control relay panels, the group will float a new company for construction equipment. The company has already done the initial spadework for its entry into the construction equipment industry.

"The proposed company will be a joint venture entity in collaboration with Chinese and Japanese companies," said Amit Patel, vice-president (operations), Danke Products, a Danke group company.

The group is likely to pump in around Rs 100 -120 crore for its joint venture. However, Patel did not divulge the details of foreign partners in the project, citing confidentiality agreements with joint venture partners.

The group will set up a facility to manufacture construction equipments and its joint venture partners will not only provide technology but also pick up stake in the joint venture.

Construction equipment industry is fast growing in India. As per a report on construction equipment industry in India, jointly prepared by India Brand Equity Foundation (IBEF) and KPMG Advisory Services, the size of the Indian construction industry is more than Rs 8,000 crore as on 2007 and it is growing at the rate of 30 per cent.

However, construction equipment industry in the country is highly fragmented. Out of 200 domestic manufacturers, top six players account for around 60 per cent of the total output.

There is a huge growth potential in construction equipment industry and that is the reason why many leading players have entered the space. Some of the known construction equipment companies include names such as BEML, Ashok Leyland, Caterpillar, Hindustan Motors, Ingersoll Rand, L&T, Komatsu, Telco Construction Company, Volvo India.

Recently, Vadodara headquartered Ameya Group tied up with Netherlands based company ADAMAS for marketing high quality diamond drilling and cutting equipments used in high value infrastructure and construction industry in India.

With a view to consolidate its operations, Danke Group has also initiated the process of merger of its subsidiary companies. Currently, the company has already filed a petition with Gujarat High Court seeking approval for the merger of its subsidiaries.