Ludhiana-based Metalman Auto, a leader in sheet metal and tubular automotive components and largest supplier to auto majors, has entered into a joint venture with an Italian company Cellino SRL.

The new JV company, Metalman Cellino, will manufacture medium sized sheet metal components primarily for cars, commercial vehicles and heavy equipments. The company will also cater to the needs of European automotive market through Cellino. Both the companies will hold an equal stake in the JV Company.

Metalman Auto director Nishant Jairath told FE, ?On the strength of the joint venture, the group would be targeting a turnover of 500 crore in next five years?. The company which had a turnover of about Rs 100 crore in 2008-09 is expecting a turnover of about Rs 150 crore in 2009-10.

Jairath added, ?After making strong footprints in two wheeler and heavy equipment component industry, the company was planning to enter into cars and commercial vehicles component segment and at the same time Cellino was also looking for a partner to enter India market, so nothing could be better than joining hands with a partner who has access to latest technology, state-of-the-art manufacturing set up, widespread customer base and products range in sync with requirements?.

He said post recession the domestic demand has dropped by about 20% while exports were a major causality which came down by 40%. He said now demand in automobile industry and infrastructure sector was picking up and to cope up with new orders, the company is augmenting capacities at Aurangabad and Ludhiana plants. Metalman has already taken over a local company in Aurangabad involved in supplying complete three wheeler cabins.

Sharing the JV details, Jairath said ?A strong technical and financial collaboration with Italy?s Cellino Group will give Metalman access to cutting edge technology to not only manufacture but also to design. It would be all types of sheet metal and tubular components and subassemblies required by commercial and car manufacturing companies.?

While elaborating the expansion plans of Metalman, Jairath added, ?Metalman Group with the technical support of Cellino is in the process of setting up a new state-of-the-art manufacturing facility in Aurangabad with an investment of Rs 20 crore which would be invested in the period of two years. The commercial production is likely to start in the next financial year. The new JV targets to achieve a turnover of Rs 20 crore within one year of establishment and expected to grow at the rate of 20-25% annually.

Commenting on exports Jairath added that ?the company has a buy back arrangement with the new partner which would contribute at least 30-50% towards the turnover.

There was huge future in exports in view of the joint strength as JV partner was well entrenched with European customers and added with low cost productivity.? He said the company would target new markets in

European Union, Romania, France, Spain and Germany where there was huge demand for company products.