Hitachi New Tools Foray With Electrex
Japanese giant Hitachi has tied up with local unit Electrex India for setting up a joint venture to manufacture electric power tools through an investment of Rs 25 crore. The new venture, to be called Hitachi Koki India Ltd, has obtained permission from both the FIPB and the Reserve Bank of India.
Hitachi Koki is an independent member of the highly diversified Yen 150-billion Hitachi group. It is Japans leading manufacturer of power tools. The Japanese major already has a technical collaboration with Electrex for manufacturing certain types of power tools.
For this venture, Hitachi will be holding 80 per cent of equity (Rs 20 crore), while Anant Hedge, managing director of Electrex, will hold the rest. Kazuhiko Kishi, Hitachi Kokis senior executive, will be the president of the new project, while Hegde will be the vice-president. Electrex sources said the new range of power tools to be manufactured by Hitachi Koki India will not include the models currently produced by Electrex. The venture will manufacture 27 types of power tools. The project will come up over four acres at Peenya industrial estate near here, where Electrex has its plant.
Hitachi Koki is expected to start commercial production in April 1999, while trials are slated for February 1999.
About Rs 9 crore will be invested in land and buildings, while another Rs 10 crore is expected to be spent on plant and machinery. The rest of the equity will be expended on working capital and contingencies. The proposed plant is expected to begin with an annual capacity of producing 78,000 units of power tools in the first year of operation and plans to reach 3,60,000 units capacity in the fifth year. Besides power tools, Hitachi Kokis product profile includes pneumatic tools, computer printers and scientific instruments.
The ex-factory value of production is expected to reach a level of Rs 145 crore in the fifth year of operation. In the first year, the company plans to do a turnover of Rs 30 crore.
Out of the total production, about 20 per cent of power tools are expected to be exported. While Electrex India has about 40 employees, the new venture will employ 180 people at the plant.