Business Standard: August 16, 2016
The Noida-based Minda Corporation Limited, an automotive component manufacturer and flagship company of Spark Minda, Ashok Minda Group, has formed a 50:50 joint venture with China’s Shandong Beiqi Hai Hua Automobile Parts Co Ltd (a BAIC group subsidiary) through its wholly-owned subsidiary Minda KTSN. The total investment amount of the JV will be $ 12.5 million (about Rs 84 crores).
The joint venture, Minda China Plastic Solutions Ltd, will initially focus on producing and selling products such as plastic oil pans and cylinder head along with other plastic under-bonnet & interior parts. It will also have the rights for production and marketing of Minda KTSN products within China. The new JV, which will start production in the next 12 to 15 months, is targeting global orders from major OEMs (such as VW, BMW and Daimler) having their manufacturing plants in China.
D C Sharma, group chief financial officer, Minda Corporation Limited, said, “BAIC has an outstanding reputation in the industry and has significant complementary synergies with our Group. Together, the new stronger JV is fully committed to the manufacturing excellence and providing technologically advanced interior plastic products in China. This strategic alliance with BAIC group and entry into high growth Chinese territory will also provide us platform in China to cater leading OEMs for our other legacy business and products.”
The Chinese JV is in line with Minda Corporation’s strategy to expand its capabilities through both organic and inorganic growth. As part of this strategy, it acquired Panalfa Autoelektrik in April this year and also started building greenfield plants in Pune & Mexico.
“This maiden JV in China would further help us in expanding our international footprint and cater to global OEM customers,” added Sharma.
Spark Minda, Ashok Minda Group, has joint ventures and technical collaborations with global leaders like Furukawa of Japan, Stoneridge of USA, Vast Access System of USA, Silca of Italy and UzAvtosonat of Uzbekistan. Minda KTSN contributed about 16 percent of Minda Corp’s FY2016 revenues and has plants in Germany, Poland and Czech Republic for products such as plastic interior trims & subsystem, kinematic modules, structural modules, soft touch technology. Minda KTSN is also in the process of setting up greenfield plant at Queretaro, Mexico for plastic interior parts. The turnover of Minda Corporation was Rs 2,445.5 crores in FY2015-16 with international business accounting for 21 percent of revenues.
Founded in 1958, BAIC Group is a leading automotive parts manufacturers in China in interior and exterior systems. BAIC Group has realised vehicle sales of 2.49 million and operating revenue of RMB 345.22 billion, ranking fifth in vehicle sales and revenue in China automotive industry in 2015.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.