Stone India plans overseas acquisition

Kolkata: Stone India, a major manufacturer and supplier of railway equipment, is planning overseas acquisition. It has bid for a European firm in similar line of activity.

“We’ve been shortlisted and the picture will be clear soon, most probably by the end of this month,” Mr Amitava Mondal, Chief Executive Officer and Managing Director of the company, told newspersons here on Monday.

If Stone India emerges as the winner, the acquisition, it was indicated, would be implemented through a SPV to be based either in Cyprus or the Netherlands, depending on the availability of tax and other benefits. Stone India’s parent company Duncan Goenka would part fund the acquisition. Also, there would be loans from Dresdner Bank.

“The size of the company we are targeting is much bigger than ours but then if we succeed we’ll have a foothold in Europe, so critical for entering into the European market with our products,” Mr Mondal said pointing out that the company had failed in its earlier three attempts to acquire other companies in Europe.

Right now, the company’s exports were negligible and mostly to countries such as Tanzania, Malawi, Mozambique, Vietnam, Australia and New Zealand.

Meanwhile, Stone India has executed an MoU with the US-based RailRunner Inc to launch the latest intermodal freight cars and transportation system technology in India. Such a system, he said, would allow seamless point to point movement of containerised goods between road and railway in cost-effective and environment-friendly manner allowing container trains at a higher speed than at present.

In the current fiscal, the company, according to Mr Mondal, proposes to spend about Rs 15 crore – Rs 5 crore to upgrade R&D facilities in its Kolkata factory engaged in the manufacture of conventional brakes, pantographs and other items and another Rs 10 crore in the new factory being set up at Nalagarh in Himachal Pradesh.

In Nalagarh unit, about Rs 10 crore has already been spent and another Rs 15 crore is to be spent next fiscal. The company has executed a technical collaboration agreement with SMA Technologies AG Germany for manufacturing 180 kVa auxiliary power converter for the Indian Railways.

Among other products to be manufactured in the factory will include biological toilet, pneumatic suspension, pneumatic suspension control system, end of train telemeters, microprocessor-based locomotive control system. The Nalagarh unit would be commissioned towards the end of this month, he said.

In 2007-08, the company’s turnover amounted to Rs 92 crore, likely to rise to Rs 120 crore in the current fiscal, he added.