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Setco acquires manufacturing unit in US

Kausik Datta  |  Mumbai 

Setco Automotive has acquired a manufacturing facility in the US of Haldex Brake Products Corporation for $4.9 million (over Rs 22 crore).
Setco Managing Director Harish Sheth said the acquisition was in line with the company's plan to expand operations in 30 countries in three years. At present, Setco has presence in 14 countries.
The acquisition came exactly a year after Setco acquired the Lipe Clutch division of Dana Corporation for Rs 16 crore. Sheth said the acquisition would be funded through internal accruals and debt.
The company would take $2 million (Rs 9 crore) from the New York branch of Bank of Baroda while will organise the balance Rs 13 crore from its internal resources.
Setco' UK subsidiary Setco Automotive N.A. Inc is the vehicle for the acquisition. Setco had been in business relations with Haldex for the past eight years.
In addition to pursuing inorganic growth, Setco has been ramping up its capacity through expansion of facilities as well.
The company had spent Rs 12 crore last year for expansion and has been investing Rs 35 crore this year to enhance its capacity to 500,000 clutches a year.
Next year, it plans to infuse Rs 50 crore to further scale up its production capacity.
"The investment and acquisition were in harmony with our commitment to deliver long term value to the stakeholders," he added.
The company, formerly known as Gujarat Setco Cluth, has posted net profit of Rs 5 crore on a total income of Rs 67 crore last year. The Sheth family, promoters of the company, holds 65 per cent stake. New Vernon Private Equity holds 14 per cent while the balance is widely held by the public.
Setco has been a supplier of clutches to all major Indian truck including Tata Motors, Eicher and Ashok Leyland.

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First Published: Tue, January 02 2007. 00:00 IST