Sumitomo To Enter Power & Telecom
Japanese conglomerate Sumitomo Corporation will launch a fully-owned Indian subsidiary on April 1. The company, which is to be incorporated as Sumitomo Corporation India Ltd, will be launched with an initial share capital of about $4 million and will focus on investments in the power, telecom, automobile, chemicals, agriculture and export sectors. It has already received clearance from the Foreign Investment Promotion Board.
Sumitomo Bank will also set up its first branch in Mumbai around the same time, while Summit Usha Martin Finance Ltd, one of Sumitomos joint ventures in India, is set to emerge as the financier for future projects taken up by Sumitomo Corporation.
The equity size has not been calculated in relation to our investment plans. The equity base will increased gradually as we tap the business potential available in India, Kazuo Fujimoto, the company representative in New Delhi, told Business Standard.
Fujimoto was reluctant to specify the size of investment planned by the company.
Asked if it would exceed $200 million, he said: this is not enough given the business opportunities here. We can easily reach this level of investment provided the projects are viable.
Sumitomo is involved in 11 joint ventures in India.
Asked if the companys involvement in the joint ventures would form part of the capital base of the new company, Fujimoto said it had not yet been decided.
Among the plans being drawn up for the Indian subsidiary are investments in at least five power projects and four cellular telecom projects, besides participation in joint ventures in the chemicals, automobiles, electronics and agriculture sectors.Our equity participation will be small in each case. We are not planning a majorityor even substantialequity presence in any one company, said Fujimoto.
The company also plans to make a pitch for the Delhi railway subway project..
The company is also interested in venturing into wheat and shrimp exports. Sumitomo Corporation has a major presence in a variety of sectors worldwide, including trade, power equipment, chemicals and financial services.