Sona Koyo to set up French arm

Sona Koyo Steering Systems plans to set up a subsidiary in Europe. The firm projects export orders worth ¤30 million by 2008 from Europe. The subsidiary may come up in France.

The group picked up 21 per cent equity in Fuji Autotech France last year which has subsequently come down to 17 per cent.

The proposal for the subsidiary will be placed before the board in April 2006. The formation of the American subsidiary, Sona AutoComp Inc was announced last February.

At present, the company is pitching for ¤10 million orders from Europe.The Fuji Autotech France plans are in progress to increase the exports from Europe. The company's annual export revenue is $30 million. US exports form around 80 per cent of the company's total exports.

The group's management also plans to enter capital market with an initial public offering (IPO) in Sona Okegawa Precision Forgings Ltd which has an annual turnover of Rs 100-110 crore. No time-frame has been fixed for this IPO.

The only listed company of the group is Sona Koyo Steering which reported a total income of Rs 366 crore for 2004-05 and Rs 100 crore for the quarter ended December 31, 2005.

Sona Koyo is also expanding capacity of its Chennai plant.It is setting up a new greenfield unit in Dharuhera, Haryana. It is also looking for a location in any special economic zone (SEZ) in the country. The company's existing production facilities include its mother plant in Gurgaon and another plant in Chennai (SEZ).

The proposed plants will make around 3 million pieces of manual steering gears, 5 lakh hydraulic power steering gears and 2.5 lakh electronic power steering units.