Sona Koyo to buy 21% in Fuji Autotech

Steering systems manufacturer Sona Koyo Steering Systems Ltd today said that it will be acquiring a 21 per cent stake in French auto component company, Fuji Autotech France SAS, for $6.15 million and it will also be investing Rs 125 crore in expanding its capacity over three years. Sona Koyo plans to increase its export income to Rs 100 crore by 2007 from the present Rs 5 crore.

Sona Koyo picked up a 21 per cent stake in Fuji Autotech from Fuji Kiko which in turn is owned by its Japanese partner Koyo Seiko Co.

The acquisition also entails Sona Koyo to up its stake in Fuji Kiko to 30 per cent in three years at the same price it has picked up the stake now.

Announcing the details of the investments in France, chairman and managing director, Surinder Kapur, said, "This is our first step towards gloablisation. We aim to increase our income from exports to 45 per cent of our topline by 2010."

Kapur said the company will now have easier access to Europe for supplying steering system for both passenger car and commercial vehicles.

The Rs 125 crore investments in its Gurgaon unit in India will see the company increasing its capacity of steering gears to 800,000 units per annum by 2005 from the present capacity of 550,000 units annually.

The company will also expand the capacity of power steering to 220,000 units per annum from the present level of 100,000 units. Senior executives at Sona Koyo said that 60 per cent of the project will be funded through debt, comprising predominantly domestic loan and a small foreign loan component. The exact break up is yet to be finalised.

H1 net up 14.3%: Sona Koyo Steering Systems today reported a 14.3 per cent growth in net profit at Rs 6.28 crore during the first-half of 2004-05 compared with Rs 5.49 crore last fiscal.