JBM Group buys out TSNA

New Delhi, October 9, 2012: The Delhi-based JBM Group has bought out the 50 percent stake held by its partner Thai Summit Group (through Thai Summit Autoparts Industry Company Ltd, Thailand) in the equal joint venture Thai Summit Neel Auto (P) Ltd (TSNA). The JV was etched between Neel Metal Products Ltd of the JBM Group and the Thai Summit Group to float the private limited company TSNA in December 2003.

TSNA supplied automotive components for two- and three-wheeler manufacturers with Bajaj Auto as one of its key customers. Others include TVS Motor, HMSI, Hero MotoCorp, India Yamaha Motor, Suzuki Motorcycle India and Royal Enfield.

With the 100 percent buy out of the stake in TNSA, the JBM Group plans to improve the operational efficiencies and management of the company now known as Neel Auto (P) Ltd (NAPL). With the acquisition of the additional stake, JBM is targeting net sales of Rs 1,000 crore in FY’13 compared to Rs 850 crore last fiscal, a growth of around 18 percent. In FY’11, the JV posted net sales of Rs 600 crore.

Nishant Arya, executive director of JBM Group, said NAPL would optimise production at its existing facilities this year and stabilise in view of the flat growth in the industry. TSNA’s operations have been affected, by about 10 percent, due to the market slowdown but NAPL is working in sync with its customers on long-term projects. While refusing to disclose the total value of the stake acquisition, he said it would be funded entirely through internal accruals.

TSNA has six manufacturing facilities at Gurgaon in Haryana, Chakan in Maharashtra, two plants in Hosur in Tamil Nadu, Pantnagar in Uttarakhand and Nalagarh in Himachal Pradesh. The company supplies components like fuel tanks, welded assemblies, tubular frames, mufflers, guards, saree guards, handlebars, painted bodies and other related parts to OEMs. Its facilities and infrastructure include pressing, welding, pipe bending, painting, powder coating and special purpose machines.

The company has 3,000 employees on board including 600 regular employees. In terms of investments, only minor investments are in the pipeline but Arya did not rule out further acquisitions in future. “We are always open to new projects whether in emerging markets or developed economies like Europe, provided the companies are available and have a strategic fit with JBM.”

JBM is in the process of wrapping up its joint venture with Straprova for making bus bodies and the announcement on it is expected to follow in a month’s time.

Earlier this year, the JBM Group had acquired 51 percent stake in the UK-based engineering and design company Tesco GO through JBM Cadmium in a bid to strengthen its business further. The company is involved the complete designing of all types of vehicles right from the concept stage including packaging and engineering. It is working with Volvo, Fiat, Mahindra & Mahindra, Volkswagen, Ashok Leyland, Tata Motors and other OEMs on vehicle designs. It also provides engineering services to auto majors like Mercedes- Benz/Daimler, Lamborghini and McLaren among others. The Group is also strong in verticals like suspension, vehicle integration, electronics and trims that will facilitate new avenues for JBM to enter in the future.

SHOBHA MATHUR