Texmaco set to form multiple foreign JVs for rail products

Texmaco Rail & Engineering Ltd, the demerged wagon making arm of Texmaco Ltd, is close to firming up multiple joint ventures with foreign partners within the next six months to manufacture railway-related products and infrastructure, chairman Saroj Poddar told DNA.

The joint ventures will be in line with Texmaco’s collaboration with UGL Ltd, an Australian listed entity, to manufacture specialised wagons.

The UGL joint venture, after facing some initial hurdles, will start operations in the first quarter of 2012-13, he said.

“We expect to announce 2-3 joint ventures within the next six months. Foreign collaborators are being brought in. All these joint ventures would be associated with rail (transportation). Beyond this, it wouldn’t be proper for me to disclose further,” Poddar, head of the K K Birla Group company, said.

The move of Texmaco Rail is to cash in on the railway ministry’s stated objective to modernise its infrastructure, including freight cars and coaches using state-of-the-art technologies and materials other than conventional steel.

While its joint venture with UGL would focus solely on exports, the proposed tie-ups would cater to the domestic market.

“Our existing joint venture with UGL is all for exports. But for future joint ventures, we are looking at supplying to the Indian Railways. I think the authorities would be more than happy to accept these products,” Poddar said.

Texmaco’s venture with UGL, a diversified group present in engineering, maintenance and facilities management in the rail, water, power and property sectors, was announced way back in 2008 through signing of a memorandum of understanding, but was formalised last December. The joint venture proposed setting up a manufacturing facility based at Texmaco’s Belgharia plant near Kolkata to design, manufacture and supply of locomotive bogie frames and platforms, wagons and wagon components mainly for exports.

“Initially, the joint venture with UGL was moving slow because the product mix was being defined. Now everything has been sorted out and things are moving at a very fast pace: we have the chief executive officer, the infrastructure in, equipment have been ordered. We will start production in the first quarter of next year,” Poddar said.

The purpose of the venture is to bring down manufacturing costs from levels incurred in Australia.

On Texmaco’s proposed foray in real estate development, Poddar said the project in Delhi would take some more time to take off as issues with the Delhi Development Authority is yet to get sorted out.

“It is moving but will take a little more time. DDA has to decide which part of the land they will take. The next hearing at the district court is scheduled for early August. Then it should get settled,” he said.

The Supreme Court a year back allowed Texmaco to commercially exploit 35% of the 31 acres, or about 11 acre, of the closed Birla Mill apportioned by the apex court after a prolonged legal battle between Delhi Development Authority and the company.

The rest 20 acre opposite Delhi University, would go to DDA, which, however, would share with Texmaco 50% of any proceeds received from commercial development of its portion as per the court ruling.