The Cheyyar facility of Ashley Alteams India Pvt. Ltd., a joint venture between Ashok Leyland and Finland-based Alteams Oy, to make high pressure die cast components, has formally gone on stream on Wednesday.
Addressing a press conference at the Cheyyar factory, R. Seshasayee, Chairman of the company, said the initial investment in the facility was to the tune of Rs. 130 crore. This would go up to Rs. 300 crore in five years. He said that the plant would have an initial capacity of 7,000 tonnes, which would be scaled up to 10,000 tonnes progressively.
Mr. Seshasayee said, the initial installed capacity of the plant would generate annual sales of Rs. 180 crore. Once the expansion took place, the facility could fetch sales of Rs. 500 crore in five years, he added.
Fielding a range of questions, he said the joint venture was also funded by Finnfund, set up by the Finnish Government. Finnfund is set up to encourage Finnish business projects outside Finland. Mr. Seshasayee said, the participation of Finnfud “has raised the stature of the joint venture”. While declining to divulge the financing details of the project, he said, some Indian banks too had financed the project on ‘softer terms’.
Mr. Seshasayee said the joint venture would focus on two fast-growing segments - telecom and automobile. With the global auto OEMs (original equipment manufacturers) going through tough times in terms of profitability, there was “significant export potential” for the joint venture, he added.
For Alteam, the joint venture is a way to hedge itself against the highly cyclical nature of the business from the telecom industry. The entry into automobile space through this joint venture could help the Finnish group bring lot more stability into the business. For Ashok Leyland, the joint venture is a ready-made supply source for HPDC components.
Mr. S. Rajagopalan, CEO, of the company indicated that the joint venture could also look at exploring other niche industries such as the defence. In this context, Mr. Seshasayee said Ashley Alteams could also look into opportunities in the aerospace field.
Petteri Wallden of Aleeams said the Finnish company was serving the HPDC component needs of the Indian telecom infrastructure companies from its plant in China. With the joint venture going on stream, the needs of the local telecom infrastructure companies would now be serviced from Ashley Alteams, he added.
