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Our Bureau

Plans Rs 120-cr buyout of Escort's stake in Carraro India

Pune , Nov. 15

Carraro SpA of Italy on Tuesday announced a Rs 200-crore second round of investment in India, including a Rs 120-crore all-cash buyout of Escort's 49 per cent stake in Carraro India, making it a wholly owned subsidiary of the Italian group. The Carraro Chairman, Mr Mario Carraro, also announced the setting up of the group's global design centre for technical and engineering design in Pune, which is the first such centre for the group in Asia and the sixth in the world.

Underlining the importance of Carraro Technologies India within the group, Mr Carraro said, "The new centre will be devoted to research and development applied to future products for the global markets. This centre will be a strategically critical competence centre for us to help reduce time to market and reduction in design cycle time of our future development."

The centre will employ about 75 engineers in the mechanical and electronics space over the next year and will conduct value-added engineering work including virtual assembly testing and virtual prototyping among others, Mr Marco Tecchio, Vice President Engineering said. The company is investing an estimated 1 million in the project.

The Italian group, meanwhile, is betting big on the India growth story and is all set to manufacture new product lines in the country to develop it into a strategic export hub.

"We will invest Rs 80 crore for expanding and adding a facility for new product lines which are being relocated from other global manufacturing facilities, so as to tap into the evolving Indian market and also for the global OEM market. We will continue to invest strongly in India because of the high quality of production and skilled labour available here. India is the ideal manufacturing hub... to service markets in the Asia Pacific region."

The group has invested Rs 310 crore in India in less than two years and is on the verge of ramping up operations significantly, he pointed out.

Carraro, meanwhile, is all set to manufacture industrial transmissions in the country and is setting up a plant for this. The plant is expected to go into production by October 2007, Mr Luigino Ricetto, Country Head, Carraro group, India, said, adding that the company's existing mechanical transmissions business in India is also being ramped up from 20,000 units to 30,000 units.

Agri equipment

The group companies, Carraro India and Turbo Gears, are meanwhile expected to touch total sales of Rs 266 crore by end-2006 and double that to reach an estimated Rs 570 crore by 2009. "India is a core market for the group for its OEM customers in the agricultural and construction equipment sector thanks to a dynamic agricultural market which will absorb 370,000 tractors by 2009. The strong development expected in the next couple of years in the real estate sector is also an advantage for our construction equipment business," Mr Carraro said.

Carraro India's operations are based in Ranjangaon, Pune, and it specialises in the manufacture of transmissions, axles and power trains for tractors for the domestic and export markets.

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