The worlds largest manufacturer of auto catalysts, UK-based Johnson Matthey (JM) is entering India through a 85:15 joint venture with a Calcutta-based firm.
Johnson Matthey will be manufacturing 0.5 million auto catalysts and 1.5 million two and three wheeler catalysts at its facility in Okhla in Delhi. This Okhla facility will be Johnson Mattheys ninth manufacturing facility worldwide and will be operational towards the end of the year.
Johnson Matthey has already applied to the Foreign Investment Promotion Board, seeking approval for the proposed joint venture.
Also Read
Johnson Matthey Plc chairman and chief executive officer David J Davies said the company will be investing around one million pounds in the Indian venture in the initial stage. It will decide on future investment levels depending on market growth.
The Indian subsidiary, Johnson Matthey India (Pvt) Ltd will be in partnership with Calcutta-based Aroras. Davies explained that JM already has a 60:40 joint venture with the Aroras for fabrication of platinum.
The facility coming up at Okhla will be at the Aroras existing factory for platinum fabrication.
Davies said, though there is no bar on importing catalysts into the country, yet we decided to have a manufacturing base in the country to serve our customers better.
We have been watching the progress in the country in terms of adoption of new emission norms. Presently car emission standards are applicable in the four major metros but we expect this to be extended throughout the country.
The new venture will concentrate on supply of auto catalysts to Maruti Suzuki, which has a 80 per cent share of the car market in the country and the proximity of the Okhla plant to Marutis Gurgaon facility is being considered a distinct advantage by the UK major..
JM has a long standing relationship with global auto majors like Ford, Fiat, Volkswagen(VW), Honda, Toyota for supply of auto catalysts, and it expects to extend this relationship to India, where most of them, with the exception of VW, have a manufacturing base.
JM has a 35 per cent share worldwide for catalytic converters, making it the leading player in the market. Its nearest competitor is US-based Engelhard. The two together share 60 per cent of the world market. Degussa of Germany and Allied Signal of the US (whose auto catalyst division was recently taken over by General Motors) are the other major players in the segment. JM was the first to develop technology to meet emission standards for automobiles in the US nearly 25 years ago.
The JM group has its headquarters in London, with diversified interest in refining and fabrication of platinum, gold, silver and other precious metals. In the last fiscal it had a turnover of 2.8 billion pounds, with the catalytic systems division contributing nearly 30 per cent to profits.