Suprajit Engineering Expects Pact With Japan's Chuo Spring To Be Operational Within 12 Months

The pact that Suprajit Engineering Ltd. recently signed with Japanese transmission cable maker Chuo Spring Co. is likely to be operationalised within the next 12 months, according to Ajith Kumar Rai, the founder and chairman of Suprajit Group of Companies. 

In a press release dated Nov. 27, Suprajit Engineering said it has entered into a memorandum of understanding with Chuo Spring for setting up a 50:50 joint venture in India to design, manufacture, and supply transmission cables. The two companies have also inked a technical assistance agreement.

Talking to NDTV Profit about the roadmap after signing the MoU, Rai said that it will take till the next quarter to know how the entire deal will translate.

“We just signed an MoU to get into a joint venture agreement and joint venture program. The plan is that at some time in the next 12 months, we will operationalise this MoU. So, it will take some time. We are right now in the process of finalising the entire plan for this joint venture,” the company’s founder said.

Rai noted that the idea of the MoU is to set up a joint venture company in India, which is going to be in a 50:50 ratio in terms of equity participation and manufacturing of transmission cable.

The top executive said that his company is a global firm with cable plants in multiple places. But in India, its operations with the Japanese OEMs are “limited to the Tier 1 and Tier 2 suppliers”.

“We had a strategy to break the Japanese OEM market in India, Marutis and the Toyotas of the world, and particularly in the transmission cable business. This is a specialty product of Chuo Springs, we wanted to bring to India and eventually probably exploit it to the world,” he said.

The Suprajit Engineering chairman further noted that Chuo Spring also wanted to come to the Indian market and mark its presence here.

“We are going to partner with them to make this venture out of India to manufacture transmission cables for two major Japanese OEMs to start with, and then see how we can leverage the strength of the joint venture for our global ambitions,” he said, while explaining the deal in detail.