KK Birla group company Texmaco Ltd has entered into an agreement with $4 billion Australian firm United Group Ltd for setting up a plant to manufacture new-generation wagons in West Bengal.
The two companies would form a 50:50 joint venture to form the biggest railway hub in the state, besides also exploring opportunities in areas like railway component manufacturing, exports and other railway services.
Texmaco has sought 100 acres of land from the state government for the new plant.
Texmaco President and CEO R Maheshwari said the land should ideally be located adjacent to a port and with good rail connectivity. The state government has already suggested a few places but the site was yet to be finalised, Maheshwari added.
The quantum of investment for the plant is, however, yet to be finalised since the two companies are yet to complete a detailed project report (DPR) that is due in the next three months.
The joint venture will also explore new opportunities that have emerged after the Centre’s thrust on dedicated freight corridors linking Delhi-Mumbai and Delhi-Kolkata. Maheshwari said that the proposed venture would cover design, manufacture and supply of wagons, locomotive bogies and components and encompass passenger rolling stock as well.
In recent times, Texmaco has posted a turnaround and eyeing a turnover of Rs 1,000 crore this fiscal, up from Rs 600 crore last year.
The agreement was signed in the presence of West Bengal Chief Minister Buddhadeb Bhattacharjee.
Calling Texmaco a “success story”, the chief minister said that the United Group, which is Australia's largest end-to-end rail technology solutions provider, had taken almost a year before deciding on its partner in India.
Andy Summers, chief executive of United Group’s rail division, said railway maintenance and refurbishment is a potential area of interest for the joint entity, which will initially work from Texmaco premises in the northern fringes of the city before relocating to the new plant.
“There is a huge opportunity that we may explore and it can be scaled up as per our imagination,” Summers said, adding that if work on the freight corridor accelerates, the company would put a thrust on making heavy- haul wagons first. On the other hand, if the progress is not as per expectations, the company could opt for closed-lid wagons instead.