First Indo-Russian joint venture is about to take place to produce heavy machinery locally in India. Russian heavy equipment manufacturer Uralmash and Noida- based SRB international are tying the knot to set up a manufacturing base. Eyeing growth of the steel and mining sectors in India, Uralmash plans to invest up to $5-6 million annually in the new JV.
However, these two companies already have a decade long alliance for supply and servicing of machineries for the big manufacturers such as Coal India, SAIL, NMDC, JSPL, etc.
Vladimir Pugach, Head of Exports at Uralmash said that they were looking at a joint venture company with SRB, which will be formalised in the next 2-3 months. He further added that the equity shareholding between the two partners are being discussed but it could be a 50:50 partnership.
The JV will initially focus on servicing the existing clients. Later it will spread its operation in manufacturing spare parts. The reason behind the JV is that the manufactured machineries need local customisation.
According to A P Choudhury, former CMD of RINL and a present advisor of SRB, said that these large equipment which cost up to Rs 300-Rs 400 crore take nearly two years to manufacturer and transporting them is difficult. Hence, a local manufacturing base helps in cutting down cost to an extent.
The decision by Uralmash and SRB International to form the JV is likely to boost the “Make in India” programme, and help achieve the bilateral trade target of $30 billion by 2025, set recently by the leadership of both countries.
The new joint venture “Uralmash SRB India” has still not strategised its production and servicing policy. However, according to media reports, it is expected to mainly concentrate on servicing the present partners and gradually move to manufacturing and assembly of spare parts of equipment for the complex heavy machines.