Kailash Vahan Udyog Ltd. (KVUL), started in 1986, is a leading manufacturer of tippers, trailers, tip trailers, buses, solid waste management equipments like garbage compactors, dumper placers cargo bodies, etc. KVUL has manufacturing facilities in Pune and Bangalore with 27-acre factory land. Kailash Vahan Udyog Ltd. also have heavy hydraulic and mechanical presses ranging from 500T to 1030T with a capacity to process 20000mT steel per annum. Its facilities also include cargo bodies and tippers fabrication lines. The paint shop has shot blasting unit, semi-automatic hot phosphating 7 tank process and Stoving Paint booths. It has a capacity to manufacture more than 20,000 CV bodies a year.
Mr. Raghav Gupta, Director, Kailash Vahan, says: “In the last few years, we have been continuously looking at expanding our product range by offering the best in class transportation solutions. We have tied up with some of the best global manufacturers to provide global transportation solutions to the Indian market”.
Detailing either of the JVs, Mr. Gupta said that ShinMaywa is a Japanese major specialising in special-purpose vehicles. They are market leaders in tippers, cement bulkers, garbage compactors and concrete mixers. The JV agreement was signed by Dr. Kailash Gupta, Chairman, Kailash Vahan Udyog Ltd. and Mr. Tadashi Kaneki, President and CEO, ShinMaywa Industries Ltd., in Pune on February 6. The joint venture company will be based in Pune and plans to start operations by June 2009.
The Rs. 6,000-crore ShinMaywa Group, as part of its long-term management plan ‘Value Up 200!’, has set a target of an overseas sales ratio of 25% or more. The company has decided to look at the Indian market considering the rapidly growing economy and demand for construction related vehicles for infrastructure development and also the growing demand in the areas of logistics and waste transportation. ShinMaywa is looking at the Indian market to manufacture and sell special purpose vehicles. The company feels that, through the JV, it will be better equipped to build a foundation for the production and sale of special purpose vehicles in the Indian market.
Mr. Tadashi Kaneki, President and CEO, ShinMaywa, said: “As the Indian economy has been growing, ShinMaywa is expecting a larger demand for the vehicles for infrastructure development.”
Dr. Ishwar Chandra, Chairman, J N Group, said: “This joint venture with the Japanese leader would bring in newer technology which would adequately cater to the Indian commercial vehicle manufacturers as well as various MNC’s which are establishing their base in India.”
The JV comes at a time when three Japanese commercial vehicle manufacturers are eyeing the Indian market – Hino, Nissan and Isuzu. Hino is planning to launch its trucks in the Indian market shortly and Ashok Leyland-Nissan JV has announced its plans to launch products in the LCV segment by 2011. Isuzu, through Swaraj Mazda is stepping its presence in the bus market initially and later plans to enter the truck market as well. ShinMaywa is a major supplier of vehicle bodies to all Japanese commercial vehicle manufacturers with a marketshare of over 50% in Japan. The JV with ShinMaywa will help KVUL to cater to the requirements of these Japanese majors in India.
Kailash-Rolfo JV
The second JV is with Rolfo of Italy to manufacture car carriers. The new JV company, Kailash Rolfo India Pvt. Ltd., will produce car & truck transport vehicles for the automobiles sector in India. The JV agreement was signed by Mr. Raghav Gupta, and Mr. Dario Rolfo, President, Rolfo S.p.A., in Pune on February 12, 2009.
Rolfo is a European leader, having experience well over 120 years in manufacture of range of car/truck transport equipment as well as an extensive range of general cargo bodies, trailers/semi-trailers and isothermal bodies. Their production facilities are located in Italy, France and Argentina and the products are sold all over Europe, the Americas, Middle East and Africa.
Going forward, car and truck carrier would be an important product to look at for the Indian market. All the Indian vehicle manufacturers are planning to increase their manufacturing capacity and these vehicles will have to be transported from their manufacturing facility across the country. For example, just look at Maruti Suzuki which is targetting a million vehicles in sales in the next couple of vehicles. How many car carriers would be required to cater to the requirement? Typically car carriers in India carry anywhere between 4 to 6 cars in one trip compared to European car carriers which can carry upto 10 cars in a similar trailer or on a slightly shorter length. The key difference is the design.
Companies like Rolfo come with years of experience in manufacturing car and truck chassis carriers and this will greatly contribute the success of the JV in India.
Mr. Dario Rolfo, President, Rolfo S.p.A., said: “Despite global economic turmoil, considering the large captive domestic market in India, sound and safer technology being offered by the JV company and excellent marketing & local management expertise of Kailash Vahan Udyog, inspired us to form a JV with them.”
Mr. Raghav Gupta said: “We are looking forward to this JV as this would bring European technology to us from the European leader and with our pan-India presence, we are confident that the JV company would play dominant role in domestic market. The JV company would also play a substantial role in global exports for Rolfo.”
Both the JVs are with global leaders in the respective segments and will provide Kailash Vahan access to technology, design, production process and most importantly access to global OEMs. The advantage that Kailash Vahan bring to the JV is a strong platform for both Rolfo and ShinMaywa to enter the Indian market, knowledge of the local market and access to Indian OEMs.
“Both the JV partners are serious about the Indian market and are looking at it for the longterm. They are confident about the Indian growth story and are looking to capitalise on the low manufacturing cost for sourcing components”, adds Mr. Gupta.
Other ventures
Kailash Vahan has also been working on other product segments for which it has entered into technical tie-ups.
In 2007, the company signed a technology tie up agreement with Katmerciler of Turkey for manufacturing garbage compactors. “We will build over 150 units of garbage compactors by the end of this financial years. We are also developing products
for liquid waste management. We foresee wastage management as a good growth opportunity for the future”, adds Mr. Gupta.
Another small but interesting JV is with Cramaro of Italy for covering solutions for tippers. Mr. Gupta says: “Very soon a regulation is expected that all tipper bodies must get covered while transporting cargo. Cramaro produces specialized tarpaulin for tippers and even for steel coils. The JV was signed a year and products are under development”.
Despite the downturn in the market, Kailash Vahan is targetting a marginal growth this year. The company clocked turnover of Rs. 100 crores in 2007-08 and is targetting Rs. 115 crores for the current year. Some of the new products like garbage compactors has helped the company in utilising its capacities.
