Sona Okegawa looking at acquisitions in US, Europe

Sona Okegawa Precision Forgings Limited (SOPFL), a joint venture between Japan's Mitsubishi Materials Corporation and India's Sona Group, is on the hunt for acquiring a forged gears facility in Europe or the US and plans to raise funds for the acquisition from the capital market.

"We are looking both at the American and European markets for an acquisition. We plan to produce components for non-automotive off-highway vehicles that have applications in earth-moving and farm equipment from the acquisition," chairman Surinder Kapur said on the sidelines of a CII conference here.

He added that the company would turn to the capital market to raise funds for the acquisition if and when it works out.

Kapur, who is also the chairman and managing director of Sona Koyo Steering Systems (SKSSL), a joint venture between the Sona Group and Japan's Koyo Seiko Company, said SKSSL would be setting up a new facility in Daruhera near Manesar in Haryana at an investment of Rs 400 crore.

The new plant will manufacture 150,000 electronic power steering systems and will take up the cumulative capacity of the company to 2 million manual steering gears, 2 million steering columns, 0.5 million hydraulic power steering systems and 250,000 electronic power steering systems.

Kapur said Sona Koyo was also planning to set up a manufacturing facility in a special economic zone around Chennai that would be completely export oriented.

He, however, gave no other details saying that these plans were still at a preliminary stage. Sona Koyo currently has one manufacturing facility in Gurgaon and two in Chennai, including a export oriented unit.

The firm is targeting a top line of Rs 1000 crore by 2009-10 and is on course to touch Rs 520 crore in the current financial year, up nearly 37 per cent from Rs 380 crore in 2005-06.