October 07, 2008

MAN Group to set up rail wheel plant in India

Germany based MAN Group will enter the business of manufacturing premium wheels for high speed trains in India largely catering to the export market. It has finalized a fellow German technology partner and is in advanced process of selecting an Indian partner as a third player in the JV project.

The initial investment for the project will be USD 310 to USD 320 million to be shared among the partners. Both German companies will hold 51% in the JV only if an Indian player in taken aboard. An announcement to this will be in June 2008.

MAN Group has finalized the site of the plant which would be located in the steel rich producing area of central India. It will set up two units forging and finishing within one of India's special economic zones. The plant shall be operational in the next 24 to 30 months.

The plant will have an initial production capacity of about 180,000 units, which would be eventually ramped up to 300,000 units a year. Of this, about 15,000 units would be targeted to be sold in India primarily with the rest to be exported to Europe, South America and Asia Pacific regions. About 60,000 units of black wheels will be exported directly to Germany from here.

The plant will essentially make high speed compliant train wheels suitable for the German and other European markets. Besides, it will also make wheels for the metro rail transport and other locomotives.

A MAN Group official said that "The demand from the Indian market for train wheels is about 15,000 units a year, but our facility will be producing much more than that basically to cater to the huge export market. We will be tying up with a major European innovative wheel manufacturer."

In addition, the group announced that it will launch premium heavy trucks used for applications in the mining and construction industry in the domestic market in the second half of the year. These trucks will be marketed in India through its Pune based JV partner Force Motors and will be made available through direct imports from the company's manufacturing base in Italy. It intends to sell about 500 to 800 such premium trucks in India by 2010-11.

MAN Force Trucks, a 30:70 JV, has been selling medium and heavy commercial vehicle in the domestic market having a capacity of 16 tonne or more. It aims to export 12,000 units, out of the installed plant capacity of 24,000 units to Asian and African countries by 2010.