Hitachi Partners with SFO Tech To Set Up Joint Venture
Japan-based Hitachi Ltd will join hands with India's SFO Technologies Pvt Ltd to form a joint venture in the field of advanced control systems for thermal power plants.
Recently, SFO Technologies has raised Rs 101 crore from IL&FS Investment Managers (IIML) and Hong Kong-based fund manager Asia Mezzanine Capital Group (AMCG) to strengthen its manufacturing and design facilities in Cochin and Bangalore, apart from enabling the company to look at acquisitions in the USA and Europe.
The new joint venture called Hitachi NeST Control Systems Pvt Ltd will be set up in October 2011 and operate out of Bangalore. While Hitachi will own up to 70 per cent stake in the JV, the remaining 30 per cent will be held by SFO Technology. Under this agreement, Hitachi and SFO Technologies will expand their control systems businesses in India.
The JV will provide engineering, manufacturing, commissioning and after-service advanced control systems for thermal power plants and is targeting sales of approximately Rs 150 crore (2.6 billion yen) by March 2015. The JV partners hope to achieve this by leveraging Hitachi's edge control technologies, advanced manufacturing technologies, extensive industry experience and expertise in plant control systems while SFO Technologies' mature control systems and nationwide sales and service network will help it flourish in India.
The Indian market for information and control systems for social infrastructure is expected to grow steadily, with the addition of 200 GW in the next 10 years.
Earlier, Hitachi has made significant investments in India in companies like BGR Energy Systems Ltd, a Chennai-based company that manufactures super-critical turbines, generators and boilers.
SFO Technologies, a part of the Kochi-based NeST Group, has interests in engineering, software and manufacturing services. The company employs around 4,000 people and is one of the largest electronic manufacturing services (EMS) players in India, focused on low-volume, high-mix products in emerging segments, such as healthcare, automotive and industrial space. SFO provides services across the entire spectrum, including design, manufacturing and embedded software development.