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Rediff.com  » Business » Asian Electronics plans JV with German co

Asian Electronics plans JV with German co

By Deepshikha Monga in New Delhi
December 26, 2005 13:07 IST
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Asian Electronics, having signed a memorandum of understanding to acquire a 50 per cent stake in US-based Westinghouse Lighting recently, plans to form a joint venture with a German company in the retail fixtures business.

The Euro 100 million turnover German company will be flying in its representatives to India next month to finalise the JV, according to sources close to the deal.

Suresh Shah, chairman and managing director, said that the company was considering such a deal. He, however, refused to divulge further details about the German company or the nature of the deal.

Asian Electronics is expected to end the current financial year with revenues worth Rs 160 crore (Rs 1.6 billion). It is targeting a Rs 360 crore (Rs 3.6 billion) turnover next financial year.

While the company plans to raise Rs 80 crore (Rs 800 million) through private placement, which will go towards financing its expansion plans, some of it will also be accounted for by internal accruals.

The proposed JV with the German firm will strengthen the company's presence in the retail fixtures market. The company had earlier acquired Chennai-based Raymold Fixtures, now called Asian Raymold, which is a leading player in the growing retail fixtures market.

Asian Raymold, with a projected revenue of Rs 35-40 crore (Rs 350-400 million) this financial year, is expected to touch Rs 80 crore (Rs 800 million) next financial year, riding on the retail boom.

Asian Electronics has been strengthening its overseas presence. Apart from its JV with Westinghouse Lighting, which gives it better access to European and US markets, it also has a JV with Midcom, the $100 million transformer major which has two manufacturing facilities in the US and China.

The company is also planning to acquire three domestic companies in the lighting fixtures business. These are regional players based in Delhi and Bangalore, said Shah. It is also considering setting up manufacturing facilities in north India.

The company is importing new machinery for making electronic ballasts from the US. This will raise production capacity from the current 1 million units a month to 3 million units a month by the end of the current financial year.

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Deepshikha Monga in New Delhi
Source: source
 

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