Wadia Group firm Bombay Burmah Trading Corporation Ltd (BBTCL) has struck a deal to sell its precision springs business (housed under a division called BCL Springs) to its overseas technology partner NHK Spring Co. Ltd of Japan for approximately Rs 180.5 crore, the company has disclosed to the BSE on Wednesday.
VCCircle had first reported about NHK Spring Co being in advanced talks to acquire BCL Springs on August 25.
The decision to sell the BCL Springs division is in line with the corporation’s policy to restructure its business portfolio to enable greater focus on its core activities, the statement adds.
The company currently deals in 1,400 types of spring and its clientele includes Maruti Udyog (Zen, Wagon R, Swift, Esteem and Alto), Suzuki Powertrain (new model diesel engines), TATA Motors (Indigo, Indica, Marina) and Hindustan Motors (Isuzu), among others.
The auto component unit was set up as a separate company in 1985, in technical collaboration with NHK Spring Co. Ltd of Japan, to manufacture cold coiled precision springs. It commenced commercial production in 1987 and over time, expanded its installed capacity from 1,000 metric tonne to 10,000 metric tonne and from one manufacturing facility to two manufacturing units – to cater to the growing demands of the Indian automotive components market. In 1992, it was merged into BBTCL.
The total market for auto components in India is around Rs 990,000 crore ($22 billion) and components aftermarket constitutes around 25 per cent of the total market, valued at Rs 24,750 crore ($5.5 billion), according to data available with ACMA. The growth drivers for the industry are also in place – namely, rising demand for vehicles as vehicle production grew to around 17.9 million in 2010-11, global original equipment manufacturers (OEMs) entering India to establish their manufacturing base, low-cost operations and high quality standards, availability of low-cost, skilled manpower and policy initiatives, among others.
BBTCL is part of the Nusli Wadia Group, which has diversified business interests across airlines, plantations, foods, textiles, chemicals, laminates, electronics and light engineering, health care and real estate.
Incorporated in 1939 and headquartered in Yokohama, NHK Spring Co. Ltd has interests in automotive suspension springs, automotive seats, precision spring & components, HDD suspensions and mechanical components, industrial machinery & equipment (brazed products, ceramic products, pipe support systems, polyurethane products, metal-based printed wiring boards and parking systems) and security products.