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Crompton Greaves Ltd, belonging to the Avantha Group, has signed a joint venture agreement with Indonesia’s PT Prima Layanan Nasional Enjinring (PLNE) to manufacture High Voltage (HV) and Extra High Voltage (EHV) switchgear in that country.
While Crompton Greaves would have a 51 per cent stake in the venture, PLNE, an engineering company belonging to an Indonesian Government company Perusahaan Listrik Negara (PLN), would own 49 per cent stake. However, financial details including the total investment planned were not disclosed.
The joint venture would be part of Crompton Greaves’ global foray and would deepen its presence in Indonesia.
Under the agreement, the Indian company would transfer technology for the manufacture of the entire range of switchgear for the network from 70 kV to 500 kV over a five-year period. It would be localised through Crompton Greave’s new manufacturing base in Indonesia and production was likely to commence in 24 months. Crompton Greaves plans to distribute the products from the joint venture through its network in South-East Asia and the Pacific region.
Laurent Demortier, Chief Executive Officer and Managing Director, Crompton Greaves, said the joint venture was “an important milestone in CG’s expansion strategy”. He was confident that the deal would facilitate development of a range of new products that would meet the needs of the market in that region.
Indonesia has been an important market for CG for more than two decades and it was a “preferred local and principle manufacturer of power transformers” with an installed capacity of 10,000 MVA per year there. The installed generation capacity of the country was anticipated to double to 84 GW by 2020 and the market for HV and EHV switchgear equipments in South-East Asia and the Pacific region was expected to cross $500 million in the near future, Crompton Greaves said in its filings with the stock exchanges.
Shares of CG were trading at Rs 92.70 (face value Rs 2), down by 50 paise, in the BSE about two hours into trading today.
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