TRF Ltd, an associate company of Tata Steel that recently acquired a 51% stake in Singapore-based York Transport Equipment ( Asia ) Pte Ltd, says it is looking at the acquisition as a new business opportunity for the company.
TRF acquired Baker Technology’s 51% stake in York Transport at a price tag of Singapore $16.575 million (around Rs 44.26 crore).
The Singapore-based company has thus become a TRF subsidiary even though the remaining 49% stake in YTE is still held by Baker Technology.
YTE has manufacturing facilities in nine Asian countries and in Australia.
While TRF is into making bulk material handling equipment, coke oven equipment, port & yard equipment, engineering process equipment, etc, YTE is a multinational company manufacturing trailers and trailer axles.
Asked about the strategy behind acquiring YTE, the TRF managing director, Sudhir Deoras, in a recent written reply to FE, said that while there were commonalities between the two companies in areas such as fabrication, machining, welding, fitting, etc, the acquisition had at the same time opened up “a new business line” for TRF.
“It is a diversification move to get into another vertical that is slated for exponential growth, especially in India ,” said Deoras.
The material handling equipment major funded 50% of the acquisition through internal accruals and the balance with borrowings.
The two companies are to remain in their respective lines of business. TRF has no plans to transfer to YTE its technological capabilities in the area of material handling equipment manufacturing, said the TRF managing director.
On the other hand, TRF’s Indian presence will help open up the Indian market in a big way for YTE, said Deoras.
YTE, which has a December closing, had a turnover of around Rs 200 crore in 2006, compared with TRF’s Rs 347 crore in 2006-07.
Asked whether TRF was looking forward to a bigger presence in the Far Eastern countries of Vietnam , Malaysia , and Thailand and even China in the coming years, Deoras said the company was “certainly looking at markets beyond Indian boundaries.”
