Date:14/06/2005 URL:

http://www.thehindubusinessline.com/2005/06/14/stories/2005061400060800.htm
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Foreign forays

THE ANNOUNCEMENT BY the Tata group of plans to invest in a steel and mining project
in Iran is but part of a broader trend of Indian enterprises aggressively acquiring
old assets or creating new ones abroad. The amounts involved, for now, may not be
very large. But they are growing (it more than doubled to $1.5 billion in 2003-04
from $750 million three years ago) and, what is more, are catching up with
investments flowing into the country from abroad if the numbers of the third
quarter of the last fiscal, the latest period for which official data is available,
are anything to go by. Clearly India Inc. is looking at opportunities abroad with
as much fervour as foreigners are in India.

This is just as well. Indian businesses have for long had an inward orientation
that may have had its roots in the insular outlook of Indian society itself but was
also largely shaped by the industrial policy that the nation had adopted as its
development model, post-Independence. The seeds of this shift lay in opening up its
market to external competition, after 1991. The removal of licensing and other
constraints in domestic fresh capacity creation, too, was a logical offshoot of
this policy of liberalisation on the external front. Once Indian enterprises
realised that with vastly scaled up operations, they could handle external
competition in the domestic market, it was only a matter of time before they took
the battle to other markets. As it happened they found in the backyard of their
Western competitors victims of similar bruising wars, units ripe for the picking.
But not all of this hunt overseas can be attributed to the inter-play of global
market forces. Some of it can also be attributed to woeful shortages of critical
raw materials such as crude oil, coal, electricity and, non-ferrous metal ores,
forcing local enterprises to look to overseas investments as a means of securing
reliable supplies. That India, despite its image as a nation richly endowed with
industrial raw material, should be looking to source supplies from elsewhere is an
ironic twist to the phenomenon of India Inc.'s outward orientation. The crisis is
of India's own making. A regressive domestic policy environment and an indifferent
political authority have combined to raise hurdles to creating new capacities
within the country, as in the case of the failure to augment production of coal for
power generation.

The logic of globalisation and the domestic backlash that must inevitably follow
dictate that production capacities be created in the markets that are meant to be
served. While barriers to trade (both real and potential) in most economies are
formidable, capital flows are still largely free. Viewed thus, Indian enterprises
setting up production capacities to cater to the local markets that they hope to
serve, is only to be expected. But India is still to acquire a positive image or a
position of authority in international affairs commensurate with its potential if
not current achievements. Till then Indian investments will always be vulnerable to
hostile action by host nations.

Date:24/05/2005 URL:
http://www.thehindubusinessline.com/2005/05/24/stories/2005052401740200.htm
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El Forge to acquire UK co
Our Bureau

CHENNAI: El Forge Ltd, a Chennai based firm, has approved the acquisition of a
majority stake in the �4.5-million Shakespeare Forgings Ltd (based in Birmingham,
the UK).

The board has appointed a sub-committee to finalise the terms of the acquisition,
according to a press release.

Ucal Fuel to buy AMTEC of US

Our Bureau

Chennai , March 31.

UCAL Fuel Systems Ltd has decided to acquire AMTEC Precision Products Inc of the US
for a consideration not exceeding $28 million (about Rs 125 crore).

In a communication to the National Stock Exchange, it said that AMTEC is engaged

mainly in the manufacture of auto-ancillary products for supply to US auto majors.
It has two manufacturing plants in Elgin, Illinois, a suburb of Chicago. It also
has a wholly owned subsidiary with one manufacturing facility in Rockford,
Illinois.

At its board meeting on Thursday, Ucal Fuel decided to acquire up to 100 per cent
of the equity/preference capital of AMTEC. The company will seek shareholders'
approval at an extraordinary general meeting on May 4.

Eicher to buy US firm for $2.5 m

Our Bureau

New Delhi , May 25

EICHER Motors Ltd on Wednesday said that it has decided to invest $2.5 million for
the acquisition of a US-based company engaged in computer-aided engineering and
design services.

Investment banking firm Avendus Advisors is advising Eicher Motors Ltd for this
transaction.

According to Mr S. Sandilya, Group Chairman and Chief Executive, Eicher Group, "The
proposed acquisition of the US-based engineering and design services company will
provide a strong platform for growth in the engineering services business that has
tremendous potential and synergies with the commercial vehicle business."

Escorts acquires 100 pc stake in Polish co

Our Bureau

New Delhi , March 30

ESCORTS Ltd on Wednesday announced that its wholly owned subsidiary, Escorts Agri
Machinery Inc, US, has acquired 100 per cent equity in the Polish company, Farmtrac
Tractors Europe Sp.zo.o (FTES).

The acquisition comes in the wake of a major export order worth $8.56 million that
Escorts AMG won recently from the Ghanaian Government for Escorts Tractors and
other farm mechanisation equipment.

The acquisition will enable Escorts to expand its European base, by increasing the
reach of its Farmtrac range of tractors, with a deeper penetration into the
extremely competitive Western European markets and fast growing African, Asian and
Latin American markets.

The company will benefit from the opportunities offered by the emergence of Poland
as a manufacturing and marketing hub for the delivery of tractors to Western and
Central Europe after it became a part of the European Union in May 2004. This move
will enable Escorts to target countries such as Spain, Portugal, Austria, Germany,
France, the UK and Italy more effectively.

FTES already has a distribution network of 56 dealers in Poland and 10 distributors

across key EU and Central European markets such as Ireland, Belgium, Denmark,
Slovenia, Croatia, Serbia, etc.

"After the enviable order we won recently from the Government of Ghana and this
latest acquisition of our Polish JV, we intend to actively seek a larger market
share for our Farmtrac Tractors in European countries and further strengthen our
brand equity in international markets in the times to come," said Mr Rakesh Chopra,
Business Head, Escorts Ltd, Agri Machinery Group.

In June 2000, Escorts had initially taken up 49 per cent stake in FTES, which was
subsequently enhanced to 64 per cent in May 2003. FTES, which was earlier known as
Pol-Mot Escorts Sp.zo.o., is a Polish limited liability company with share capital
of approximately $2 million.

Tata Motors signs pact with Spanish bus firm Hispano Carrocera for 21 pc stake
Our Bureau

(Left to right) Mr Andres Mugica, Director (Operations) Hispano Carrocera; Mr

Gerardo Mugica, CEO, Hispano Carrocera; Mr Ravi Kant, Executive Director, Tata
Motors, and Mr R.S. Thakur, General Manager (Corporate Finance), after the signing
of the investment agreement in Madrid on Thursday.

Mumbai , March 17

MR Ravi Kant, Executive Director, Tata Motors, has been appointed Chairman, Hispano
Carrocera SA, following the formal agreement on Tata Motors' acquisition of a 21
per cent equity stake in the Spanish bus company.

Mr Gerardo Mugica, CEO, Hispano Carrocera, handed over the share certificates to Mr
Ravi Kant at a meeting in Madrid on Thursday. Also present was Mr Andres Mugica,
Director (Operations), Hispano Carrocera, an official statement said.

Tata Motors has a call option on the remaining 79 per cent shareholding. With the
signing of the investment agreement, Tata Motors will have the licence for
technology and brand rights from Hispano Carrocera.
The 21 per cent equity stake for a total price of 12 million euros comprises
equity, debt and technology licensing.

Mr Ravi Kant has been appointed Chairman of the Spanish company. The board
additionally has Mr R.S. Thakur, General Manager (Corporate Finance), Tata Motors,
Mr Gerardo Mugica and Mr Andres Mugica.

The immediate priority, Mr Ravi Kant said, would be to infuse adequate funds into
the financially constrained bus manufacturer and enhance its top line through a
mixture of growth in the existing markets, tapping new ones and moving its buses
through Tata Motors' international network.

The funds infusion would be by means other than exercising the 79 per cent equity
option, which can be anytime over the next five years.

Hispano Carrocera had slipped into loss when its market collapsed soon after it
invested in factories and bus design. It operates two manufacturing facilities in
Zaragoza, Spain and Casablanca, Morocco and "the product designed by Pininfarina
has won Bus of the Year awards in their markets."

The Zaragoza works can produce 800 buses a year. Mr Ravi Kant further believes the
strategically positioned Casablanca facility would help in the Tatas' plans for
growth in Africa, including Francophone Africa. Traditionally, Hispano Carrocera
has built buses on outsourced chassis. Given customers' right of choice on chassis,
this practice would continue, the new bus chassis proposed for development by Tata-
Daewoo eventually coming in as one more option, Mr Ravi Kant said.

TVS Logistics buys UK co CJ Components

Our Bureau

TVS Logistics now has access to a wider client base in Europe and the UK company
gains access to manufacturers in India and components suppliers here reach clients
in Europe.

Chennai , Feb. 23

TVS Logistics Services Ltd has acquired the UK-based CJ Components Ltd through its
subsidiary TVS Automotive Europe Ltd.

TVS Automotive Europe has acquired an 80 per cent stake in CJ Components, a family-
owned company offering services such as components sourcing, supply chain
management, warehousing and logistics support. Following the acquisition, the new
company, TVS CJ Components Ltd, will operate out of Daventry, UK.

Announcing the acquisition here today, Mr R. Dinesh, Executive Director, T.V.

Sundram Iyengar & Sons Ltd, said that the new company will drive TVS's business
plans in Europe, which in the short term includes expanding into Germany.

TVS Logistics now has access to a wider client base in Europe and the UK company
gains access to manufacturers in India and components suppliers herereach clients
in Europe. Clients in hand and new ones, such as JCB, Lister Petter, an engine
manufacturer, Perkins and Land Rover, with whom discussions are at an advanced
stage, will contribute to the company's growth plans, he said. The tie-up with the
UK company will also help TVS Logistics realise its ambition of becoming an end-to-
end provider of logistics services. While declining to name the customer, Mr Dinesh
said that discussions are afoot to manage a leading manufacturer's entire supply
chain. An announcement may be expected in the coming the weeks, he said.

With TVS CJC in UK, TVS Logistics Iberia in Spain and another such joint venture
planned in Germany, its European business is set to touch Rs 50 crore this year and
double in the coming year, he said. The company is targeting a turnover of Rs 500
crore in 2006-07, he added.

CJ Components business activities also include value-added services such as packing

and kitting, barcoding, warehousing, logistics, Just-in-time deliveries. Its
promoter, Mr Clive Jarrett, said that the company's clients include Cummins, Case
New Holland and McCormick. India has emerged a low-cost supplier of components of
international quality and the joint venture would benefit by better exploiting the
business opportunity.

Acquisitions by major Indian Players

Indian Company
Company/Plant acquired/Set-up abroad
Located in
Size of the deal ($ mn)

Amtek Auto
Smith Jones Inc.
US
20

Amtek Auto
GWK Group
UK
37

Bharat Forge
Carl Dan Peddinghaus GmBH*
Germany
116#(euro)

Sundaram Fasteners
Dana Spicer Europe* (Forging unit)
UK
2.6

Sundram Fasteners
Sundram Fasteners (Zhejiang)**
China
5

G. G. Automotive Gears
Name not disclosed. US company that manufactures high precision custom gears and
planetary gears.
US
110

Source: Businessworld, 23rd February 2004 * Plant **Plant set-up #Approximate