Sumitomo Corporation has
brought a 49% stake for Rs 1180.99 Cr in the joint venture company, Mukand Sumi
Special Steel Limited, a leading specialty steel supplier for the fast growing
automotive and engineering industries. Mukand Ltd. retains 51% equity of this
joint venture company.
The joint venture is engaged
in the business of rolling, finishing and marketing of alloy steel wire rods
and bars made from blooms and billets procured exclusively from Mukand Ltd.’s
Hospet plant in Karnataka. The JV has 100 acres of land adjoining Mukand’s
existing plant at Hospet for the proposed construction and commissioning of new
steel rolling facilities by mid 2020 at an approximate cost of Rs 600 crore.
The automotive sector in India
has grown rapidly in FY 18 and is expected to continue to expand for several
years. The auto component sector in India is a Rs 3 trillion industry,
currently exporting of Rs 740 billion a year, and is a major success of the
‘Make in India’ programme.
Mukand Ltd. is the preferred
supplier of specialty steels to all global manufacturers in the Indian
automotive sector for their critical components.
For Sumitomo Corporation, a
leading Fortune 500 company in 129 locations in 66 countries and regions, this
investment is their largest in India. This is also one of the largest equity
investments in a manufacturing company in India by any Japanese corporation for
FY 18.
Makoto Horie, Senior Managing
Executive Officer, General Manager, Metal Products Business Unit, Sumitomo
Corporation, said that it was a very proud moment for Sumitomo Corporation as
they were keen to strengthen their presence in India, one of the fastest
growing markets in the world. He stated that the corporate value systems of
Sumitomo Corporation and Mukand Ltd were aligned and is highly confident of the
success and growth of this joint venture.
According to Niraj Bajaj,
Chairman and Managing Director of Mukand Ltd., Mukand and Sumitomo Corporation
have already been working harmoniously and closely together for the past 5
years in another joint venture and he sees great synergy and strength brought
to this joint venture by both companies.