The venture, in which Raybestos is likely to pick up a majority stake of 51 per cent, will commence operations next year, Raybestos director (sales and marketing) Ulrich Muller told newspersons here on Monday. All the facings to be manufactured under the venture would be asbestos and lead-free.

To start with, both the partners have already signed a letter of intent for marketing the Raybestos branded products in the domestic market. ``This would later be converted into a joint venture.''

``We are planning to set up a greenfield plant in Haryana for the purpose. The site and other formalities are being finalised at present,'' Muller added.

Besides catering to the needs of the Rs 115 crore domestic market, a major chunk of the production from thenew unit would be exported.

Speaking on the occasion, CAL vice-chairman and managing director Vijay Mehta said, ``We have been test marketing the product in India and have got a good response.'' The company, which has been original equipment manufacturer for Maruti, Telco, Mahindra and Mahindra, Ashok Leyland and Tafe, is now foraying into the replacement market with the new product, he added.

This, he said, is a major step for Clutch Auto' vertical integration in terms of total in-house dependence on major critical inputs for manufacture of world-class clutches in the country. As part of the upgradation drive, the company has invested Rs 19.85 crore between 1995-96 to 1997-98 and a capital expenditure of Rs 7.58 crore is slated for 1999-2000.

``This has been financed by a foreign currency term loan of $1.35 million, an Italian line of credit of 2,107 million Italian lira under export oriented programme from Exim Bank and Rs 5 crore by way of non-convertible debenture subscription from IndustrialInvestment Bank of India. Besides, Haryana State Industrial Development Corporation is actively considering the company's proposal for a term loan of Rs 5 crore to supplement the domestic requirement of expansion-cum-modernisation project, which includes establishment of a world-class facility for another key input -- diaphragm springs,'' Mehta added.