The Hindu Business Line : Maruti plans jt venture with Japanese co Futaba

New Delhi, Sept. 18 Maruti Udyog Ltd, which was today renamed as Maruti Suzuki India Ltd, is planning to establish a joint venture company in financial and technical collaboration with Japanese component major Futaba Industrial Co, for manufacture and sale of exhaust system components for its cars. Industry sources said that the estimated project cost would be about Rs 182.16 crore, which includes equity and debt.

According to sources, while Futaba Industrial will hold 51 per cent stake, Maruti’s holding will stand at 49 per cent. The proposed paid-up capital of the JV is pegged at Rs 90 crore consisting nine crore equity share of Rs 10 each, sources said, adding that Futaba would hold 4.59 crore shares amounting to Rs 45.90 crore.

No objection for JV

Maruti has already approached Foreign Investment Promotion Board with the proposal. Sources pointed out that the proposal attracted Press Note 1 of 2005 as the foreign collaborator, in this case Futaba, has an existing technical assistance agreement with Mark Exhaust Systems Ltd (MESL) for manufacture of exhaust system components — which falls in the same domain as the proposed joint venture. Sources, however, pointed out that MESL has already furnished its no-objection for the joint venture.

Futaba Industrial Co is a key component manufacturer and supplier for Suzuki Motor Corporation in the area of exhaust system component for automobile including tubular and fabricated exhaust manifolds, catalytic converters, exhaust pipes and exhaust mufflers.

Futaba, billed as the largest manufacturer of exhaust system components for automobiles in Japan, is expected to bring new technology for manufacturing. The proposed JV would focus on manufacturing and sale of exhaust system components including exhaust pipe, exhaust muffler, and exhaust manifolds.

Fourteen JVs

Currently, Maruti Suzuki has 14 joint ventures with various auto component suppliers like Sona Koyo Steering Systems, Asahi Glass, Jay Bharat Maruti Limited, Caparo Maruti Limited, Denso, Machino Plastics amongst others, all of which are located in the company’s new facility at Manesar.

The new facility for the proposed joint venture would also be located at the company’s supplier complex at Manesar which is about 100 acres.