Mitsui To Help Develop Small, Medium Export Units

Japanese trading conglomerate Mitsui & Co. has devised a unique method of backward integration under which it will build up a series of small and medium scale industries with export potential.

We want to encourage Indias export growth by infusing new technology to enable small-scale units to add value to exportable products, said Tedsuo Ishibashi, Mitsuis chief representative in India.

Mitsui is also shopping for equity stakes in power and telecom companies. We think we have done the smart thing by not applying for telecom tenders. We are now trying to pick up small stakes in several telecom companies, said Ishibashi.

 

Mitsui is the largest Japanese trading house operating out of India with an annual turnover of $1.4 billion. Mitsuis exports from India include iron ore, marine products, edible oils and textiles while the main import from Japan is chemicals. Mitsuis exports constitute 30 per cent of its trade volumes and commodity imports 20 per cent, with project-related imports accounting for the remaining 50 per cent.

Mitsui plans to incorporate a fully-owned Indian subsidiary to focus on upgradation of export-oriented small and medium size industries. I have already talked to the Foreign Investment Promotion Board about the new company, but we do not need an Indian subsidiary for our other businesses, said Ishibashi.

Mitsui plans to upgrade small and medium industries in sectors like auto components, small electronic parts, cassette tapes and engineering plastics, among others. According to Ishibashi: We may or may not take equity in these companies, depending on what they need, but we will definitely enter into a buyback agreement with them and market their products internationally.

Mitsui is also setting up a fully owned subsidiary called Asia Investment Ltd which will be based in Singapore and will invest in Indian companies as well. Mitsui is already a major contributor to the $60-million India Direct Fund which recently invested $20 million in two Indian textile companies. It also runs Sakura Bank, which has two branches in Delhi and Bombay.

Mitsui is also bidding to supply imported coal to several industries, including Jindal Steel and Mukand Steel.