Spanish firm to pick up stake in BPL unit

Spanish printed circuit board maker, CIPSA Circuits' India JV CIPSA-RIC is set to pick up a stake in BPL's printed circuit board business. Circuitos Impresos Profesionales (Cipsa) has a 51:49 joint venture in India, CIPSA-RIC India, with two entrepreneurs in Bangalore. This JV has set up a manufacturing unit at Doddaballapur, near Bangalore.

BPL and CIPSA-RIC are expected to finalise the details of the JV during next week. BPL also has a PCB manufacturing unit at Doddaballapur. No comments were available from either of the companies. The move by BPL to hive off its business into a JV follows a similar move to hive off its alkaline battery business to FTA of Australia for around Rs 40 crore.

CIPSA is on an aggressive expansion plan in India and plans to invest up to $15 million in phases to expand the Doddaballapur facility, which was operational from April 2006. CIPSA started out with a capacity of 3,500 sq metres and it intends to have a capacity of 10,000 sq metres during this year.

The company expects to reach $20 million by 2010. About 80 per cent of the capacity is targeted at the export market. CIPSA-RIC's Indian customers include Pricol, L&T, Solectron Centum, ECIL and 3M among others, while the international segment is made up of Zollner, Behr Hella, GE Power Controls in Italy & UK, Technomec Italy et al.

A subsidiary is likely to be set up in Europe later this year to support the customers there. After hiving off the alkaline and PCB businesses, BPL will be left with the healthcare equipment business and mold design, manufacturing and plastic injection molded parts business. According to BPL, these two businesses reside within attractive and vastly scalable industries, both from a domestic as well as a global perspective.

Commenting on the way forward for BPL after hiving off the CTV business, Aji Nambiar said, "BPL will focus its resources on scaling up these two businesses exponentially and managing them for value. The management is also examining potential partnerships for delivering the desired levels of velocity and value creation that we seek."

"We do not foresee any immediate issues in the management of these two businesses. However, given the highly competitive nature of these industries, we plan to monitor these businesses closely and take appropriate actions as may be required going ahead," he added.