Hitachi may initiate talks with Tata Motors

The company aims to increase its stake further in Tata Hitachi

Japanese major Hitachi Construction Machinery hinted that it would find a "mutually agreed" way with Tata Motors to increase its stake in construction equipment manufacturing joint venture, Tata Hitachi.

"Ofcourse, we have a business partner Tata Motors. We will try to speak , mutually agree. We will try to find the most appropriate way together with Tata Motors," President and CEO of  Hitachi Construction Machinery Yuichi Tsujimoto told Business Standard, responding to a query on whether it would consider to increase its stake further in Tata Hitachi.

Tata Hitachi, which was earlier known as Telcon, is currently a 60:40 JV between  Hitachi Construction Machinery and Tata Motors (TML).

Tsujimoto, who  was in the city to launch a new 20-ton class hydraulic excavator manufactured at the Kharagpur plant, did not share any further details on the matter.  

Incidentally, during his interaction with the media, he noted the the company would aim to make India as the "global manufacturing hub". Equipments manufactured at its Khragapur plant in West Bengal are likely to be exported to Africa, Middle-East and South East Asia in coming months.

However, when asked for confirmation on Hitachi's intention to increase its take in the JV, Tata Hitach Managing Director Rana Sinha said it was "premature" to comment.

Tata Hitachi, India's biggest manufacturer and supplier construction equipment and the unlisted company, was initially a wholly-owned subsidiary with a technical collaboration with Hitachi. Later, in 2000, Hitachi Construction Machinery became an equity partner with a 20% stake.

Then in 2005 it increased its stake by another 20%. Later in 2007, TML  sold a 20% stake in the company to Hitachi Construction Machinery  for Rs 1,159 crore, making it a 60:40 JV between Hitachi Construction Machinery and Tata Motors.

Apart from its newly commissioned Kharagpur plant, Tata Hitachi has two more plants one located at Dharwad in Karnataka and the other at Jamshedpur in Jharkhand. The vendor park for its Kharagpur plant, which is likely to see an estimated investment of Rs 300 crore, is set to come up from next September.