French cable maker ties up with Polycab

France's Nexans, Europe's largest cable manufacturer, has tied up with India's leading cable maker Polycab to set up production facilities in India with an investment in excess of ¤55 million (about Rs 320 crore) in two phases.

The 51:49 joint venture, majority-owned by Nexans, will spend ¤25 million (Rs 145 crore) in the first phase, for a unit in Daman to make cables for power, oil and gas, shipbuilding, material handling, railways and windpower industries by the first quarter of next year. It will also market cables from Nexans in India.

Nexans, which was spun out of Alcatel in 2001, had said last year it wanted to reduce its exposure to economic cycles and planned to focus on energy and infrastructure sectors.

In the second phase, the partners will invest another ¤30 million (Rs 175 crore) to make extra high voltage cables. This unit is likely to come up at Vadodara in Gujarat by 2010, said Michel Lemaire, Nexans' executive vice president for the Asia-Pacific region.

The venture hopes to generate sales of ¤50-60 million by 2011, about a third of this from the domestic market.

The Indian market is currently valued at ¤60 million and that is expected to grow to ¤200 million by 2011, on fresh investment in power transmission and distribution infrastructure, he said.

"Currently we have sales of 17 million euros from India and target is to quadruple it in three years," he said.

Polycab currently has sales of over ¤450 million in India, from ten plants that employ 1,500 people to make power and building cables.

The ¤7.4 billion Nexans is present in more than 30 countries and employs 22,000 people.