Sona Steering Venture With Mitsubishi Materials Launch Rs 60cr
The New Delhi-based Sona Steering Systems Ltd and Japan's Mitsubishi Materials Corporation yesterday announced the beginning of their joint venture, Sona Okegawa Precision Forgings Ltd. Mitsubishi will have a 30 per cent equity stake in the venture while Sona Steering will hold 45 per cent. The remaining equity will be held by investment bankers, who are yet to be decided.
The tie-up was announced by Sona Steering's promoter Surinder Kapur and Mitsubishi Materials senior managing director Takehiko Mizugai at a press conference during the ongoing Indian Engineering Trade Fair here.
According to Kapur, the joint venture company also plans to raise about Rs 21 crore as loans from institutions like the Industrial Credit and Investment Corporation of India and the Bank of Tokyo, for which negotiations are on at the moment.
The Rs 60-crore project is slated to begin production by April 1998. It will be implemented in two phases, with a target of 3.2 million pieces a year in the first phase of production. A sales turnover of Rs 100 crore is targeted by the turn of the century.
In the first phase, the venture will produce differential gear/pinion using Indian alloy steel and synchronisers rings using an alloy of copper, zinc, aluminium and manganese.
This alloy has been patented by Mitsubishi Materials. The products of the first phase will be marketed to major transmission system manufacturers and trans-axle and rear axle manufacturers in the country.
In the second phase, Sona Okegawa will diversify into other products such as clutches and sprockets for agricultural equipment, automobiles and transportation vehicles; copper alloy forgings for oil hydraulic equipment; nickel-based alloy forgings for aerospace engines, marine engines and petrochemicals equipment; forgings for constant velocity joints; and air-conditioner parts.
Mitsubishi Materials is part of the Mitsubishi group and grossed sales of about $8 billion in 1996. It is also the largest independent gear manufacturer in Japan.
Sona Okegawa Precision Forgings will be part of the Rs 200-crore Sona group of companies.