Minda Industries forms JV with FRIWO for manufacturing EV components

Auto components maker Minda Industries Ltd (MIL) on Friday said it has entered into a joint venture agreement with FRIWO AG Germany to manufacture and supply various electric vehicle components in the Indian subcontinent with a planned capex of Rs 390 crore in the next six years.

MIL, the flagship firm of Uno Minda Group, will hold a majority stake of 50.1 per cent, with the rest held by FRIWO AG Germany -- a global manufacturer of innovative power supply units and e-drive solutions, the company said in a regulatory filing.

In a separate filing, the company said it will also expand production capacities of its two-wheeler and four-wheeler alloy wheels business for which a total capital expenditure (capex) outlay of Rs 264 crore has been made.

On the JV, MIL said the partners will combine their manufacturing prowess and technical expertise to offer full line e-drive-solutions for electric two- and three-wheelers in the Indian subcontinent market.

"While joint venture plans to incur capex of around Rs 390 crore over a period of next six years to support such growth in India, the outlay in initial two years would be around Rs 160 crore," MIL said.

MIL plans to invest Rs 71 crore in one or more tranches as equity investment to partly fund the above expenditure.

The remaining funding requirement will be met through a mix of internal accruals, equity investment and debt, it added.

"The board has also approved investment of euro 15 million in FRIWO AG via a capital increase in order to strengthen the industrial partnership between the two groups. The planned transaction and the capital measure is subject to the regulatory approvals, including Reserve Bank of India," the filing said.

Uno Minda Group CMD Nirmal K Minda said electrification will play an important role in the transformation of the mobility industry and presents major opportunities to the entire mobility ecosystem.

"We are delighted to partner with FRIWO to expand our product capabilities to serve such rising EV opportunities. By combining our technologies and production capabilities, we can create a true leader in the rapidly growing e-vehicles market," he added.

Stating that the partnership has been forged at an opportune time where the EV industry is on the cusp of growth trajectory facilitated by favourable government policy and incentives, Minda said,"We are confident to play a key catalyst role in electric vehicle revolution and sustainability mobility in India."

FRIWO CEO Rolf Schwirz said the JV is a great opportunity for the German firm to facilitate its expertise and innovation driven e-mobility business.

"The joint venture will have a distinct product portfolio with shared facilities, sophisticated, but also market proven technology, high quality and engineering standards from both FRIWO and UNO MINDA, at optimised costs to the customers' benefit," he added.

MIL said the JV will help it to further strengthen its EV product portfolio and accelerate development and manufacturing of various components in India to fulfil increasing client requirements and offer high-quality customised e-solutions in record speed.

On the alloy wheels capacity expansion, MIL said it will enhance the two-wheeler alloy wheel capacity by 20 lakh wheels per annum at its existing Supa plant in Maharashtra.

The current expansion is part of a two-phased expansion planned by the company at the time of foraying into the two-wheeler alloy wheel business. The total capacity of Uno Minda group will be 56 lakh wheels per annum after completion of this expansion, it added.

"The current capacities are now already booked with incremental demand coming from leading OEMs requiring the company to further expand its capacities," the company said, adding the additional capital expenditure for the capacity expansion will be Rs 190 crore.

The expanded facilities are expected to commence operations by the quarter ending March 2023.

As for the four-wheeler alloy wheel business, MIL said its arm Minda Kosei Aluminum Wheel Pvt Ltd will expand capacity by 30,000 wheels per month at its plant in Gujarat to cater to the increased demand from leading original equipment manufacturers (OEMs) in the vicinity.

"This is in addition to the ongoing capex of 60,000 wheels per month at Bawal plant," it said, adding after the expansion, the total four-wheeler alloy wheel capacity of Uno Minda group will be 3.3 lakh wheels per month.

The additional capital expenditure for the capacity expansion will be Rs 74 crore and the expanded facilities are expected to commence operations by the quarter ending June 2023, the company said.