TRF Ltd, an associate company of Tata Steel, has signed an agreement to acquire Dutch Lanka Trailer Manufacturers Ltd (DLT).
In the first phase, TRF would acquire a 51 per cent stake for $8.67 million and also sign a call and put option agreement for acquisition of the balance 49 per cent at $8.33 million.The deal marks a foray into the trailer manufacturing business for TRF. The company’s core business is engineering and supply of material handling equipment and systems.
DLT has a manufacturing facility in Sri Lanka and sells trailers in as many as 30 countries. Further DLT, through its joint venture with Tata International Ltd, in India, has a manufacturing facility at Pune.
Sudhir Deoras, managing director, TRF, said, the joint venture had acquired additional land at Pune for expansion. At present, the Pune facility has a production capacity of 3,000 trailers, while the total capacity of DLT would be around 6,000 trailers.
Dutch Lanka Engineering (Pvt) Ltd, a 100 per cent subsidiary of DLT in Sri Lanka, is engaged in repairs, maintenance and service business for trailers. DLT also has a subsidiary in Oman which manufactures and sells trailers in West Asian markets.
The acquisition of DLT would help TRF move towards its target of achieving a turnover of Rs 2,500 crore by 2013. In 2008-09, the company had a turnover of Rs 723 crore.
Recently, TRF also entered into a shareholders’ agreement with Tata Capital and Jasper Industries to form a joint venture, Adithya Automotive Applications, for providing end-solutions through fabrications and machining for vehicles to be used as tippers, load bodies, trailers, refrigerated bodies, among other items. However, Deoras said, the core business would continue to account for the bulk of its turnover.
