The Rs 1,200 crore Varroc group, based in Aurangabad, has entered into a joint venture with Plastic Omnium Auto Exterior of France.
Plastic Omnium Auto Exterior will hold a 51% stake
MUMBAI: The Rs 1,200 crore Varroc group, based in Aurangabad, has entered into a joint venture with Plastic Omnium Auto Exterior of France to make automotive exterior components at a new plant in Chakan, Pune, to be operational next year.
The French company will hold a 51% stake in this venture, which will be called Plastic Omnium Varroc Pvt Ltd.
The products planned for manufacture include bumpers, bumper modules, claddings, rocker panels, finishers, structural parts and painted body panels.
Among the main clients targeted are the Bajaj Auto-Renault-Nissan alliance for the $3,000 small car, General Motors India and Volkswagen. In addition, the joint venture will meet the needs of practically every carmaker in the country.
Tarang Jain, managing director, Varroc, told DNA Money that the joint venture’s initial investment at Chakan would be in the range of 20 million euro (Rs 120 crore), with production of nearly 500,000 bumpers annually.
“Our French partner will also be setting up a technical centre at Chakan, which will focus on specialised technology for bumpers. This will be a great learning experience for us since we are not into auto exterior parts,” he said.
Given the cost-efficiencies and quality levels of Indian suppliers, Plastic Omnium could look at a buyback of some components manufactured in Chakan.
Outsourcing of design is also a possibility with the new technical centre being part of the overall India plan.
Varroc, which is targeting a turnover of nearly Rs 2,000 crore this fiscal, has 17 plants in India and two in Poland and Italy. It is looking at business of 200 million euros (Rs 1,200 crore) in Europe by 2010.
“We are eyeing turnover of Rs 4,000 crore by that time with direct exports accounting for Rs 300 crore,” Jain said.
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