Japanese construction equipment major, KYB Corporation has picked up stake in Vadodara-based Conmat Systems Pvt Ltd.
The company looks to jointly manufacture transit mixers (mobile concrete mixers for construction industry) for the Indian market.
The Japanese major has acquired 50 per cent equity stake in Conmat Systems for an undisclosed amount.
“We will set up a new manufacturing facility just next to our existing facility at Por near Vadodara. We plan to make an investment of Rs 100 crore over the next three years time,” said Prem Raj Kashyap, managing director, Conmat Systems.
After three years, the new facility will have the capacity of around 1400 units of truck mixers per annum. The company is in talks with truck manufacturers for a long term agreement.
Post the acquisition of 50 per cent equity shares of Conmat System, the new company, KYB-Conmat Pvt Ltd will be formed. The existing management of Conmat will continue to operate, while KYB will have its representative on the company’s board of directors.
“This is our first investment in India. Before joining with Conmat Systems, we had explored many companies in India. But we chose Conmat for its management strength and brand,” said Takahiro Sasaki, deputy executive officer, KYB Corporation.
The company looks to supply transit mixers in India, which according to Kashyap, has a market size of around 4500 units per annum.
“The way construction sector is growing in India, there is a potential for Indian market to grow to about 10,000 units a year in the next five years,” he said.
“In India, there is currently only one player for transit mixer manufacturing. A German company called Schwing Stetter supplies to most of the construction companies. In Gujarat, we are the first to manufacture transit mixers,” said Kashyap. The company had signed memorandum of understanding at the recently held Vibrant Gujarat Summit in January.
Conmat has an annual turnover of Rs 85 crore, while KYB Corporation has reported annual turnover of over Rs 20,000 crore. KYB holds around 85 per cent market share in Japan’s truck mixer segment.
After the partnership with KYB, Conmat looks to increase its annual turnover to around Rs 500 crore in the next 3-4 years.
