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Ambarish Mukherjee

Joint venture with Numeric Power Systems

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New Delhi Feb. 4 Socomec SA of France, Europe's leading switchgear company, and the Tamil Nadu-based Numeric Power Systems Ltd have finalised plans to undertake retail trading in the single brand `Socomec' through a joint venture company with 50 per cent foreign equity participation.

The current foreign direct investment (FDI) guidelines allow up to 51 per cent foreign equity in single brand retail. The joint venture company, Socomec-Numeric UPS Private Ltd, would be undertaking marketing, distribution and retailing of Socomec brand of UPS systems (more than 10 kVa) with three phase input and three phase output and related accessories across India, sources said.

Socomec has sought approval from the Foreign Investment Promotion Board (FIPB) for investing $1.5 million in the next two years in the joint venture company and pick up 50 per cent equity stake, sources said.

Socomec has informed the Government that with the present pace of development in the Indian economy, the demand for high technology infrastructure, particularly in the area of reliable and quality of power supply, is critical in fields such as healthcare, telecom and industrial automation and the joint venture company would help add more value to industry and consumers.

It has also stated that it would undertake retailing of products that are sold under the same brand name internationally and has its trademark or brand affixed on the product at the time of manufacturing, thereby implying that it would not opt for third-party sourcing, sources said.

Socomec has also obtained a no objection certificate (NOC) from its erstwhile Indian partner HPL, as required under the Press Note 1 issued by the Department of Industrial Policy and Promotion in 2005 that makes it mandatory for the foreign investor to obtain an NOC from its earlier Indian partner in case it had a joint venture in the same or related field.

Socomec has a turnover of more than € 230 million and has a 30 per cent market share in Europe. The company has 16 subsidiaries worldwide and eight manufacturing facilities. Three of its manufacturing facilities are located in France, two in Italy, one in Tunisia and two in India.

Its two Indian facilities were initially set up in partnership with HPL through the joint venture company Socomec HPL UPS Private Ltd. In August 2006, the French company had bought out its Indian partners and converted its Indian joint venture into a wholly-owned subsidiary.

Numeric Power is among the top UPS companies in the country and has an annual sale of over Rs 300 crore.

More Stories on : Alliances & Joint Ventures | Electrical Goods | Retailing

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