Mumbai-based Setco Automotive Ltd (Setco) and Spanish firm Lingotes Especiales S.A. (Lingotes) are investing Rs 155 crore ($26 million) to form a ferrous foundry joint venture named Lava Cast Pvt Ltd, as per a release.
The firms did not disclose who will own how much in the JV but as part of the agreement, Lingotes will come in as a technology partner for Lava Cast.
The JV will focus on developing and manufacturing fully machined ferrous casting products for the automotive & other industries, and will start commercial production in a year.
"Geographically Setco is located in the power surplus state of Gujarat, which has access to good ports as well as a good workman culture. We are excited to extend our four decades of manufacturing experience into India. Our long-standing experience in this sector will substantially reduce the uptime of this new project," said Vincent Garrido, chairman of Lingotes Especiales.
Established in Valladolid, Spain, Lingotes is engaged in designing, development, casting, machining and assembly of grey and ductile iron components.
“Bringing over 40 years of experience in the foundry industry and key OEM clients, Lingotes will help us extend our reach into new customer bases and build our collective product portfolio in the coming years," said Harish Sheth, chairman & MD, Setco Automotive.
Incorporated in May 1982, Setco manufactures clutches under the brand name Lipe for commercial vehicles in India. The firm employs over 950 people globally. It has four manufacturing facilities, including two in India and one each in the UK and the US.
Its clientele includes Tata Motors,
BharatBenz, Ashok Leyland, among others.
In April 2005, New Vernon Private Equity Ltd had invested $3.26 million (Rs 15 crore) in Setco to acquire a 14.17 per cent stake. It part exited in 2011 by selling 1.4 per cent stake in the company through the open market. It continues to own around 12.3 per cent stake.
(Edited by Joby Puthuparampil Johnson)