Sona Koyo in talks with Fuji Autotech for products sale

Chennai, Oct 29 | Updated: Oct 30 2004, 05:30am hrs
Sona Koyo Steering Systems, leading manufacturers of steering systems, plans to acquire licence from Fuji Autotech to sell its products in India. In October, Sona Koyo picked up 21% stake in France-based Fuji Autotech, a leading manufacturer of steering columns in Europe. The efforts to acquire license comes in the wake of Sona Koyos efforts to enter the commercial vehicles and off-highway vehicle segments.

Addressing a press meet here on Friday, Mr Surinder Kapur, chairman and managing director, Sona Koyo, said: The company is in the process of negotiating the licence agreement. We are looking at a technology transfer from Fuji Autotech. We hope to finalise the deal by January, 2005, said Mr Kapur.

Mr Kapur was in Chennai for the inauguration of Sona Koyos export oriented unit (EOU) in Sriperumbudur. The unit has a facility of 20,000 steering gears per month, which is likely to be ramped up to 40,000 per month.

Around 10,000 units of gears produced by Sona Koyo are likely to be exported to its joint venture partner US-based Koyo and around 5,000 units to its technological partner Mando. Our aim is to make this a zero ppm plant. As part of the companys quality initiative, EOU employees have been trained in quality control, problem solving and kaizen, Mr Kapur said. Sona Koyo has invested a sum of $4 million in the EOU initiative. We expect a return of $4 million in the first year of production. We plan to infuse funds to the tune of $4-12 million in the next two years, he added.

Currently, Sona Koyo has a facility in Chennai, which manufactures steering columns. Plans are afoot by the company to add a new line for manufacturing manual steering gears. The new line is expected to have a capacity of 1,20,000 units per year and will primarily cater to the needs of Hyundai Motor India. The line is being shifted from Gurgaon to Chennai. An investment of Rs 12 crore has been earmarked for the purpose of shifting. The work is likely to begin by January, 2005.