Rolls-Royce sells German unit LOrange
Rolls Royce Power Systems has tied up with Force Motors to shift the manufacturing base of an engine series for power generation from Germany to India, and thereby reduce costs.
Both companies have signed an agreement to set up a joint venture, which will oversee the setting up of a plant at Chakan, Pune, that will be operational by the end of next year.
Though an investment of Rs 300 crore (in Phase 1) is earmarked for the venture the manufacturing plant itself will be built using materials imported from the Germany plant. The investment will be made in respect of the stakes held by each company in the JV which is 51 per cent owned by the Indian company and the rest by the German company.
The companies are committed to manufacture MTU range of 10 and 12 cylinder Series 1600 with power outputs from 545 to 1050 hp. These engines are suitable for power generation and rail underfloor applications.
The JV company will look after the domestic and markets of neighbouring countries such as Sri Lanka and Nepal. It will also export units back to Rolls Royce in Germany for supplies to Europe and US.
"We are signing this JV after being a year in negotiations. We will duplicate the manufacturing and the processes. India will be the only manufacturing base for this engine for Rolls Royce," Prasan Firodia, managing director, Force Motors said.
While details of the initial capacity of the plant has not been shared, it has been learnt that the plant will employ 200 people.