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 Ludhiana-based Metalman Auto and Cellino SRL of Italy have inked a joint venture in India. The new joint venture com-pany, Metalman Cellino, will be engaged in manufacturing medium sized sheet metal components primarily for cars, commercial vehicles and heavy equipment in addition to catering to the needs of European automotive market through Cellino. Both the companies will hold an equal stake in the joint venture.
Speaking on the occasion, Nishant Jairath, Director, Metalman Auto, said, “After making strong foot prints in two-wheeler and heavy equipment component industry, we were planning to enter the cars and commercial vehicles component segment and at the same time Cellino was also looking for a partner to enter the India market, so nothing could be better than joining hands with a partner who has access to latest technology, state of the art manufacturing set up, widespread customer base and products range in sync with our requirements”.
While Metalman Auto specialises in sheet metal and tubular automotive components and is a supplier to major players like Bajaj Auto, Eicher Volvo, Force Motors, GM, L&T, Renault, etc., the other partner in the joint venture, Cellino SRL is a Euro 45 million company and a supplier to Mercedes, Fiat, Renault, Volvo, Iveco, MAN, GM, CNH, etc.
As part of the arrangement, the joint venture company would be setting up a modern manufacturing unit in Aurangabad with an investment of Rs 20 crore spread over a period of two years. Commenting on the same, Jairath averred, “A strong technical and financial collaboration with Italy’s Cellino Group will give Metalman access to cutting edge technology to manufacture and design products. These would include all types of sheet metal and tubular components and sub-assemblies required by commercial vehicles and car manufacturing companies.” “As on today”, added Nishant Jairath, “most companies manufacture products as per designs from customers and have no inputs in the design of the product. The joint venture – Metalman Cellino – will therefore will be an integrated solutions provider rather than be a component supplier only”.
Targeting to achieve a turnover of Rs 20 crore within one year of establishment of the joint venture company with an expected growth rate of 20 to 25 per cent annually, Metalman Auto has already taken over a local company in Aurangabad, which was involved in the stamping business and was supplying complete 3-wheeler cabins. It was mutually agreed with Cellino to shift this activity to the joint venture company so that production activity could be commissioned immediately. Expected to be beneficial for both the companies, as it would turn out same quality of parts at low cost as preferred by most OEMs around the globe, according to Nishant, Metalman Auto in particular would get business from European markets and other export markets.
Asked if technological know-how is also an area where Metalman Auto could profit from, Nishant refused to answer and instead drew attention towards the fact that his company has a buy-back arrangement with Cellino. “We have a buy back arrangement with our partner which would contribute at least 30-50 per cent towards the turnover. We see a good future in exports in view of our joint strength, i.e., joint venture partner’s popularity with their European customers and our low cost productivity,” he added.
With manufacturing units at Pithampur near Indore and Aurangabad in Maharashtra where motorcycle frames and other sheet metal and tubular components are made for Bajaj Auto, Metalman, in addition to the joint venture with Cellino Srl, is investing in capacity to cater to the increasing demand for components. The company is thus planning to invest another Rs 10 crore for the proposed expansion, and with an intention to become a Rs 500-crore player in the next five years.
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