GE unit takes stake in Titagarh Wagons
GE Equipment Services, has entered into a strategic alliance with Titagarh Wagons Ltd (TWL) to expand in the area of freight wagon infrastructure, targeting the railways as a key customer, reports Archana Khatri.Updated: Jul 24, 2007, 01:51 IST
GE Equipment Services, a unit of global giant General Electric Co, said on Monday that it had entered into a strategic alliance with with Kolkata-based Titagarh Wagons Ltd (TWL) to expand in the area of freight wagon infrastructure, targeting the railways as a key customer.
Under the agreement GE Equipment Services, a global transportation service provider, and GE Commercial Finance will buy 15 per cent of TWL’s equity. Company officials told reporters that the alliance will not only facilitate more funds into TWL, but also give the GE unit access to Titagarh-manufactured wagons which it will lease to Indian Railways and private shippers in India.
GE is also looking at setting up a wagon maintenance unit and a locomotive plant in India and feels that the synergy will also offer a competitive advantage to the company.
The alliance is expected to offer an early lead to GE Equipment Services in the wagon leasing market in India as soon as an expected policy for leasing of wagons is finalized. GE will also be able to sell TWL-made components in markets outside India.
“We will have (component) sourcing opportunities to the US and European Clients” said Dhananjay(Dan) Nalawade, President and CEO of India for GE Equipment Services.
With GE’s investment, TWL plans to step up the pace of wagon manufacturing and come out with more user-friendly wagons with improved capacity, lighter weight and longer life-cycles.
“The alliance will help us in capturing a higher market share” said Umesh Chowdhary, Managing Director, Tatagarh Wagons Limited.
Two manufacturing facilities of TTL, in Titagarh and Uttarapara, churned out 2,400 wagons in 2006-07, 50 per cent of which went to the Indian Railways and 50 per cent to private freight carriers.
TWL is also expected to make use of GE’s asset management technology, better maintenance and management practices. GE has plans to invest $8.0 billion in the Indian infrastructure sector by 2010 in airports, ports, warehouses, power, roads, dedicated freight lines and other infrastructure facilities.