Indian rolling stock firms have been pushing their manufacturing capacity to reach a notch higher. Aiming in the same direction, an important strategic alliance was announced by Titagarh Rail Systems (TRSL) and Amber Group for a joint venture/SPV in India and France as well.
Both TRSL and Amber group, via its wholly owned subsidiary Sidwal Refrigeration Industries Pvt Limited, will invest approx Rs 120 crores each to obtain around 50% each in the SPV. These investments will be used to set up the new railway component business as well as a fresh equity investment in Italy’s Firema, to expand their business into the European markets.
Under the collaboration, a rail vehicle manufacturing facility will be set up in India to manufacture critical railway components & subsystems used in the manufacture of Railway & Metro coaches and will also make fresh equity investments into Titagarh Firema SpA, Italy, an associate of the Titagarh Group.
Commenting on the deal, Jasbir Singh of Amber said “This will be a game changer for Amber as not only will it give us a very strong foothold to make customer base global, it will also give us a preferred access to the demands of one of the strongest and fast emerging rolling stock manufacturers in the country. Through this new SPV, we shall be able to provide comprehensive integrated solutions to rolling stock manufacturers for railway subsystems in India & overseas while addressing almost 20-25% of BOM of passenger coach.”
This alliance exponentially increases the total addressable market for both Sidwal & SPV. We intend to leverage on this alliance to get market and technology access to Europe and the rest of the world. This will also be our first overseas foray into manufacturing and will give us the knowledge and experience of making the company global, Singh added.
Further, the two groups are in an advanced stage of discussions for obtaining technology for such components from global leaders including from Europe. While the list of these components will be announced by the JVC-SPV in due course, they would include coach interiors, coach toilets, kitchens, seats, and other important railway subsystems.
Notably, the joint venture would target to achieve a wallet share of at least 20% value or INR 150-200 lacs per passenger coach by way of developing components and subsystems that are fitted on these coaches.
Understanding the expertise of Titagarh Rail and Amber Group
Kolkata-based Titagarh Rail works in the railway rolling stock space for both freight and passenger rolling stock. Titagarh, apart from being an established railway wagon and metro coach manufacturer, is also presently executing the prestigious projects of Vande Bharat trains, Surat and Ahmedabad metro, and Pune metro, and as well as currently executing its first export order for passenger rail components received from Firema. Importantly, Titagarh is targeting a capacity of almost 800-850 coaches per year in the coming years.
Delhi-NCR based Amber Group is a diversified B2B company having three business verticals – Consumer Durables, Electronics (EMS), and Railway Subsystems & Mobility. Sidwal, an Amber group company, has expertise in the train air conditioner market and has also signed a technology licensing agreement with Ultimate Group to manufacture passenger coach doors and gangways.
The strategic partnership with Firema will not only facilitate Sidwal’s entry into the European market but will also give Sidwal preferred access to Firema’s demand.
Both companies are investing to grow capabilities and capacities for various products that can be exported to Europe such as Train mechanical and electrical components by TRSL and HVAC, doors, gangways, and pantry systems by Sidwal.