Leading Indian auto parts maker Bharat Forge (BFL) today said it has entered into an agreement with David Brown Group, a supplier of automotive engineering products to form a joint venture company.
The JV -- David Brown Bharat Gears System India (DBBGSIL)-- in which both the companies will have 50:50 equity partnership will serve the Indian heavy engineering industry and will supply products to sectors like power, mining, defence, steel etc.
"BFL, a global leader in manufacturing automotive and non-automotive components today through its wholly owned subsidiary BFIVL, signed a shareholders agreement with David Brown Systems India (Holdings), part of David Brown group, a leading global manufacturer of gearing products and services to from a JV company in India," Bharat Forge said.
The move is aimed at diversification of Bharat Forge into non-auto business sectors and the JV company aims at serving power, wind, rail, cement, metals, rubber, mining, hydro, defence and aftermarket industries initially.
"Aligned with the Kalyani Group's strategy to diversify into non-auto business sectors and also to enter equipment manufacturing, this joint venture is one more step in the direction of reiterating our strong commitment to providing world class technology to the fastest growing core infrastructure market in India," said Bharat Forge CMD BN Kalyani.
The JV company will operate, initially, from Bharat Forge's facilities. However, by the middle of 2012, it intends to "have a dedicated site for gear box assembly and testing.
Further, it will "set up two service centres in Bangalore and Kolkata by the end of 2011. Additional location for service centres in Delhi and Hyderabad are being planned by the end of 2017", the company said.
It added that these service centres will be designed to world class standards, providing rapid after market service and support to key industries.
"We recognise India is a high growth territory for gearing products and services...This joint venture enables us to develop these high demand and growing industries providing customer proximity through a local network," David Brown Chairman Jim McColl OBE said.
Bharat Forge is the flagship company of $2.5 billion Kalyani group, manufacturing various forged and machined components for the automotive and non-automotive sectors.
David Brown is the part of Clyde Blowers and is a leading manufacturer of gear products and services.
