The Hindu Business Line : Italy's Dell'Orto inks pact with Eco Auto Components

ITALIAN auto component major, Dell'Orto, has made its Indian foray by signing a joint venture agreement with auto ancillaries firm, Eco Auto Components Ltd (EACL), previously known as Escorts Auto Components Ltd, and by picking up 10 per cent stake in EACL.

"As per the agreement, Dell'Orto will hold 74 per cent stake in the new company, Dell'Orto India Private Ltd (DIPL), while EACL will have 26 per cent stake," said the EACL Managing Director, Mr Bharat Caprihan.

Dell'Orto, which supplies carburettors, oil pumps and fuel injection systems to leading auto companies of the world including Ferrari, Renault, BMW, Fiat, Honda and Lamborghini, is looking to make India its manufacturing hub for a few components starting with stationary engine carburettors.

"Initially we would be setting up capacity to produce one million carburettors a year, all of which would be exported. We expect to commence production by mid-2006. Subsequently, Dell'Orto may shift the carburettor line to India once we reach peak volumes. DIPL will also make components for cars," said Mr Caprihan.

Dell'Orto has the option of increasing its stake in EACL up to 26 per cent.

Commenting on the newly formed DIPL, Mr Caprihan said that it would have a working capital of Rs 4 crore, and would be investing about Rs 6 crore in the next two years for making a new assembly line at EACL's facility at Faridabad.

While DIPL will have 100 per cent buyback agreement with Dell'Orto Italy, EACL will also supply its products to DIPL, Mr Caprihan said.

EACL currently makes several components such as oil pumps and clutches for the two-wheeler industry with Kinetic, Royal Enfield and Hero Honda being its major customers.

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