Minda Industries Ltd.

Auto electrical parts manufacturer Minda Industries Limited (MIL) of the NK Minda Group is planning to invest Rs 250 crore on expansion, including acquisitions and a foray into vehicle battery production, for which it has tied up with Europe's leading automotive supplier FIAMM SPA of Italy. The target for the fiscal 2007-08 is to touch a turnover of Rs 1,000 crore and as a part of the strategy to achieve that we would be investing about Rs 250 crore on expanding MIL's activities. Apart from strengthening existing business of auto electrical components and diversifying into new product categories, the company was looking for acquisitions in both domestic and overseas market for medium-sized companies for which it has earmarked Rs 150 crore. Currently, the company is considering about three options in Italy, which would not only strengthen our existing product line but would also add some allied lines. In India also the company was looking for takeovers in allied auto electrical products. On the company's foray into vehicle battery manufacturing, he said the company has signed a technical collaboration with Europe's leading automotive supplier FIAMM SPA of Italy. The company will invest Rs 40 crore this year in setting up a battery plant at Pantnagar with a capacity of 4 million batteries per annum when fully operational. MIL is eyeing revenues of Rs 50 crore in the first full year of operation from the batteries and the projected revenues in the third year is Rs 125 crore. The company will be manufacturing batteries for the two wheeler and four-wheeler segments, incorporating the latest technological advances, including the Valve Regulated Lead Acid Battery (VRLA). The technical tie-up with FIAMM would provide MIL access to the former's technology for the product. The agreement also gives MIL the exclusive rights over FIAMM automotive batteries in India for sale as well as manufacture for the next 10 years. Moreover, MIL also gets the exclusive rights to market and export 2W/3W batteries around the world. The company has already invested Rs 80 crore in expanding the capacity of its Pantanagar facility which produces electrical parts for two-wheelers and cars. The capacity now stands at around one million motorcycle part per annum and about 300,000 car part a year.


inda Industries Ltd, the flagship company of the Rs 545-crore NK Minda Group, today announced its plans to set up a new plant in Uttaranchal to manufacture automotive batteries. The project, which is targeted at the two-, three- and four-wheeler segments, is in technical collaboration with FIAMM SPA of Italy. Minda would be investing Rs 40 crore in setting up the plant, the total annual capacity of which would be four million batteries. The plant is likely to be completed by December this year and production would commence in the last quarter of 2006-07. Minda shares a very strong relationship with FIAMM, which is a leading automotive supplier in Europe. Collaboration for the battery project also shows the confidence that FIAMM places in our group in terms of absorption of technology and delivering of products of global standards.

Minda will manufacture and market valve regulated lead acid batteries (VRLAs), a first for India; the battery is a sealed and leak-proof one that is completely maintenance-free. Minda expects to clock revenues of Rs 50 crore from its batteries business and has projected revenues of Rs 125 crore in 2009-10. While FIAMM would supply the technology, the agreement also gives Minda the exclusive rights over FIAMM automotive batteries in India for sale as well as manufacture for the next 10 years. The company also gets the exclusive rights to market and export 2W/3W batteries around the world.

Minda Industries plans to raise between Rs 200-250 crore for expansion purposes. The components company, which makes motorcycle switches and handlebars, would use part of the money to set up a new plant in Pantnagar, Uttaranchal the emerging auto hub. Besides greenfield expansion, the company is actively looking to acquire companies to set a global footprint. Minda Industries is the flagship company of the Rs 500-crore Minda group. Besides making switches for 2-wheelers, it also makes switches and horns for passenger cars. It will raise about Rs 200-Rs 250 crore to set up a new greenfield facility in Pantnagar to cater to the OEMs that are setting up plants there. The company expects to spend around Rs 80 crore on the plant to be set up in Pantnagar. It will set up new motorcycle handle bar assembly there. The company plans to start operations by December this year. The company has also set apart a separate sum for acquisitions. IT want to set up a global footprint. The company also plans to spend around Rs 25 crore in setting up a tool room and design centre. The money raised will be a mix of internal accrual and debt. It is also in talks with private equity investors to raise the rest of the money. But, It is also looking at raising FCCBs or GDRs to raise some money to fund our expansion plans. Early this year , the auto component maker had set up its greenfield plant in Indonesia to supply to OEMs like Honda, Yamaha, Suzuki and Kawasaki. It already has four manufacturing plants in Gurgaon, Pune, Hosur, Delhi & Aurangabad.

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JOINT VENTURE

The Company on January 11, 2007 had executed a Joint Venture Agreement (JVA) with Valeo Group, France for the manufacture of alternators and starter motors for passenger cars, commercial vehicles and other two or three wheeler vehicles and / or industrial applications. The JVA will be operated through proposed Joint Venture Company (JVC) namely Valeo Minda Electrical Systems India Pvt. Ltd., whose name has been approved by Registrar of Companies, NCT of Delhi & Haryana and the incorporation activities of JVC are in process