Bharat Forge Limited (BFL) on Monday made its foray into China by formally launching a joint venture with the country's auto giant FAW Corporation for manufacturing a range of forged automotive products.
The new company, FAW Bharat Forge (Changchun) Co Ltd, in which the Pune-based BFL has a 52 per cent controlling equity, will be based in Changchun, capital of northeast China's Jilin Province, well-known for its auto industry.
"It is a momentous occasion for all of us. The formation of the joint venture marks a new era of cooperation between FAW Corporation and BFL," chairman and managing director of BFL, Baba Kalyani said.
"I would like to see FAW Bharat Forge become a preferred supplier of products to the global automotive industry. From our side, we are committed to contribute our experience, knowledge and resources for the success of our joint venture," Kalyani said at the formal opening ceremony.
Applauding the miraculous growth of the Chinese economy, Kalyani said that for him, the joint venture, the first in China for the Kalyani group, is a window through which he could be able to view the great Chinese culture and build life-long friendships with the Chinese people.
Speaking on the occasion, the President of FAW Corporation, Zhu Yanfeng said the formation of the joint venture with BFL was a "win-win" formula for the Chinese company which is aiming to become a major player in the global auto sector.
Zhu expressed confidence that with the technology and human resources strength of his company and that of BFL, the new joint venture would be a big success in the domestic market as well as emerge a major global player.
Kalyani, in an interview to PTI, also expressed confidence that the new joint venture would open up growth prospects for the company which is aiming to be the world's top forging company by 2008.
While BFL is the second largest forging company in the world, FAW is the largest automotive group in China, with a leading position in both passenger car and commercial vehicle sectors.
By joining hands with FAW, BFL will instantly become the largest forging company in China, Kalyani said without disclosing the quantum of the 'substantial' investment made by his company.
The manufacturing facility, both old and a new one, at Changchun, will be engaged in the manufacture of forged auto components for commercial vehicles, buses, light trucks, and passenger car industry in China.
At the same time, Kalyani denied earlier media reports that BFL was close to acquiring German major ThyssenKrupp's forgings unit in the US.
"That was more adventure from some news reports. There is no truth in all that," Kalyani said.
He said Bharat Forge was keen to become the world's largest by 2008 and was keeping all options open.
"That is very difficult to say. We right now have enough in our plate and we need to consolidate. But growing inorganically is part of our strategy, so if something exciting comes along, it is difficult to disregard it. So we keep our eyes open," he said when asked about future plans.
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