Ashok Leyland, John Deere float equal stake venture

The country's second largest truck maker Ashok Leyland and the US-headquartered John Deere Construction and Forestry Company Monday announced floating of a 50:50 equal stake joint venture company to manufacture and market earthmoving equipments.

The company Ashok Leyland John Deere Construction Equipment Private Limited will initially make backhoe and wheel loaders and will set up a plant near here, a company release said.

The pilot production is expected to start from Oct 2010 and full fledged production by Jan 2011.

The statement does not specify the new company's financial and production capabilities.

The new company combines Ashok Leyland's expertise and broad pan-India distribution network with John Deere's technical know-how and vast experience in the construction equipment business.

John Deere is the world's largest manufacturer of equipment for agriculture and forestry.

The $2.5 billion Indian construction equipment industry has been on a growth trajectory and forecasts 20 percent year-on-year growth for next 5 years.

Ashok Leyland turnover slides 44 percent

India's second largest commercial vehicle manufacturer Ashok Leyland has seen its turnover fall 44 percent in the quarter ended Dec 31 last year, compared to the corresponding period the previous year.

The company closed the third quarter with revenue of Rs.10 billion and a net profit of Rs.188.68 million, as against Rs.18 billion and Rs.1.2 billion, respectively, the previous year.

The company sold 8,011 vehicles during the period under review, as against 18,965 the corresponding quarter the previous year.

According to company managing director R. Seshasayee, demand continues to be depressed on account of "uncertainties".

Ashok Leyland raises $200 million from overseas

Ashok Leyland, India's second largest commercial vehicle maker, has raised $200 million from international markets for investments both in the domestic market and overseas, a top company official has said.
"The deal got successfully completed at a time when the global financial markets are in turmoil," said K. Sridharan, the company's chief financial officer. "It has been concluded at a very competitive rate."

The external commercial borrowing follows recent joint venture agreements with Nissan to make light commercial vehicles, engines and gearboxes in India.

According to officials, the overseas investment could either be for acquisitions or to set up plants abroad to make commercial vehicles, probably for the Avia brand.

Indo-Asian News Service