Taco to buy firm in Europe

Deal likely to be signed in next 3 months, turnover of up to $500mn expected.

Tata Autocomp Systems Ltd (Taco), the $500 million component manufacturing venture of the Tata Group, is in an advanced stage of negotiations for acquiring a component manufacturer in Europe. The deal is likely to be signed in the next three months.

Taco Managing Director DS Gupta said the acquisition could give the company an additional turnover of up to $500 million.

"The real big numbers are outside. We don't see an opportunity for us beyond $400 million from the domestic market," Gupta said at the sidelines of a press conference here today.

This would be Taco's first acquisition outside India. The company is also in talks with component producers in US and Korea for acquisitions.

Seeking growth opportunities abroad, several Indian automobile component companies including Bharat Forge Ltd amd Sundaram Fasteners have acquired companies abroad. Sona Koyo Steering Systems has acquired a 21 per cent stake in a French component company. Taco would be the latest to join the bandwagon.

Discussing Taco's business plans, Gupta said that in the next five years, exports would be more than 50 per cent of the company's turnover against 15 per cent now. Apart from inorganic growth, Taco is targeting a turnover of $1 billion by 2010. This would effectively mean that exports would register a 10 fold growth over the next five years against a two fold growth in topline.

Taco's core strengths, through 16 JV partners, are in the fields of plastics components, interiors and electronic components for automobiles.

Taco at present has 14 manufacturing plants, three engineering centres and three export oriented units in the country. Its JV partners include some of the global component players like Chuo Springs, Faurecia, Ficosa, Johnson Controls and Knorr Bremse.

While its principal strength was in the area of plastics and interiors for automobiles, it had recently ventured into the electronics space too through a strategic tie up with MobiApps Holdings of Singapore, a company specialising in terrestrial and satellite communication technologies for logistics.