Fujitsu To Pick 25% In Venture With Ifb
Fujitsu of Japan has decided to pick up a 25 per cent equity stake in the proposed airconditioning joint venture with the IFB group. Itochu, another Japanese giant, will hold a 24 per cent stake while 51 per cent would be held by the IFB group.
The deal with the Japanese majors marks the culmination of hectic moves by the IFB group to enter the lucrative business of airconditioners, both split and window, and tie up with a world class player.
IFB group sources yesterday confirmed that the deal had been finalised.
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Under the arrangement, the airconditioners would be marketed under the IFB General brand name. The network of IFB Industries in the consumer appliances business would be utilised for the purpose.
The airconditioning joint venture comes at a time when the IFB group is exploring ways of reorganising its home appliances business, for which it might also rope in an international partner.
The clinching of the airconditioner deal also marks a breakthrough for IFB in terms of actual control over the joint venture.
Itochus involvement in the company as an equity partner also means that the exports from the joint venture would be well tied up, since Itochu is a mega trading conglomerate. Already, the export markets for the JV have been decided upon. The markets would be Nepal, Pakistan, Bangladesh, Sri Lanka and Myanmar, which means the JV would serve as a major base for serving the entire Saarc region.
While Nag was reported to be open to a license agreement initially where IFB would market the product in India to start with, the final shape to the plan now has a joint venture being set up right from the start. The venture is expected to start functioning by March 1998.
The Rs 500-crore IFB group is now keen on consolidating its position in the automotive components business, which it believes to be its core competency, and also mark new forays into high-growth areas. Alongside the consolidation in auto components through IFB Industries and IFB Autoliv, the auto safety systems maker, IFB is also putting in place a growth-oriented gameplan for the other major group company IFB Agro, which is in the Indian Made Foreign Liquor (IMFL) and bottling business.
A proposal is also being weighed within the IFB group of merging IFB Industries with IFB Agro, but no clear view has emerged as yet on the matter, and IFB would essentially like to first put through the airconditioning venture before deciding on the course of action on the merger front. A restructuring proposal for the groups finance companies is also pending.
Fujitsu to pick up 25% in venture IFB to hold 51%, Itochu 24% Airconditioners to be marketed under the IFB General brand name Markets in the Saarc region targeted for exports