India Pistons forms JV with German firm

Auto component manufacturer India Pistons has entered into an agreement with Germany-based Mahle GmbH to form a 50:50 joint venture for making pistons for advanced engine applications.

The company's piston plant at Maraimalai Nagar near Chennai has been hived off as a separate entity to facilitate the launching of the proposed JV called Mahle India Pistons, according to a company statement.

The financial terms of the JV were not disclosed. The company said substantial investments will be made over the three years, which will primarily focus on making pistons for engines requiring future emission norms such as Euro IV and above. It will also produce advanced design pistons such as oil cooled gallery pistons for diesel engines for automotive applications.

Mahle India Pistons envisages doubling of present production capacity of 3.2 million pistons at Maraimalai Nagar plant over the next three years. By 2008, it expects to employ 300 people and aiming a sales turnover of Rs 160 crore.

India Pistons, a key member of the Rs 5,200 crore Chennai-based Amalgamations Group, has strong presence in the OEM and aftermarket segments. The total turnover of the company and its associates is expected to breach the Rs 400 crore mark by the end of this financial year.

Mahle Group is one of the largest automotive suppliers worldwide. It is one of the top three systems suppliers for piston systems, cylinder components, valve train systems, air management system and liquid management systems.

With over 40,000 employees in 110 production plants, Mahle clocked a sales turnover of over EURO4.3 billion in 2006.

A Sivasailam, chairman of the Amalgamations Group said India Piston's JV with Mahle will produce excellent synergy to meet the exacting requirements of the fast growing vehicles industry and the vehicle majors in the rest of the world.

The association with Mahle will also lead to spin off benefits for India Pistons and Amalgamations in terms of increased global visibility and fresh opportunities in the global market, he added.

Heinz K Junker, chairman of management board and chief executive officer, Mahle Group said the JV has the potential to emerge as a leading piston company for the Indian market in terms of technology and competitiveness.

Only a couple of months ago, Amalgamations Group bought out 30 per cent stake held by the US' Federal Mogul Corporation in India Pistons.