Truck major Ashok Leyland Ltd (ALL) has entered into a joint venture agreement with JBM Auto Ltd, a Delhi-based listed entity and part of the over Rs 2,000 crore JBM group, to set up a manufacturing plant for sheet metal products, tooling products among other auto components, cater to the former. The project is expected to come inside the Ashok Leyland project complex at Uttarkhand, where ALL is said to be investing Rs 2,000 crore for making commercial vehicles.
The joint venture project will be set up at Pant Nagar, Uttarakhand at an estimated initial investment of
Rs 100 crore. While JBM Auto will hold 74% of the joint venture, Ashok Leyland will hold the remaining 26%, sources added. The joint venture has been aimed at serving the requirements of Ashok Leyland’s forthcoming manufacturing plant at Uttarkhand, the sources added.
The commercial operations of the joint venture will start from 2010 in line with Ashok Leyland’s plans for the production of commercial vehicles. JBM Auto will be supplying sheet metal components for their G90 Cab and G-90 FES. When contacted, Ashok Leyland officials were not available for comments. The joint venture will have pressing and welding facilities too, sources further added.
However, speaking to FE, an official of the JBM group said that the work on the project will commence in the next few months and the project hopes to go in tandem with Ashok Leyland’s proposed mega commercial vehicle project, which is slated for commercial production in 2010.
The official said that both the companies were working on the modalities of production and capacity among other aspects. “We expect to arrive at the same soon,” he added. Both the companies are investing Rs 100 crore in the first phase and the project will be scaled up depending upon the performance and requirements, he added.
It may be recalled that Ashok Leyland had announced its plans to set up an integrated commercial vehicle project in Uttarkhand and expect to commence the project in 2010. The company has announced an overall investment of Rs 3,000 crore over three years, including a major investment at its Uttarkhand plant which will produce 50,000 vehicles initially, the sources added.