Escorts, India’s third largest tractor manufacturer and Tadano Group, Japan’s biggest and world’s leading mobile crane manufacturer, on Monday announced their joint venture to manufacture rough terrain cranes and truck mounted cranes.
The 51:49 joint venture between Tadano and Escorts will be called Tadano Escorts will initially invest Rs 60 crore and expand with volume growth.
Tadano has been selling its products made in Japan and Germany in India since 2012.
The joint venture will strengthen Escorts technology leadership and market presence in the material handling equipment space.
“The joint venture will initially invest Rs 60 crore at the leased manufacturing facility at Faridabad and set up a new factory once volumes grow,” Bharat Madan, group chief financial officer at Escorts told Financial Chronicle.
He said the company would first roll out rough terrain cranes and truck mounted cranes by November this year for the growing Indian market. At present these cranes are priced at about Rs 1.25 crore to Rs 3 crore each in the Indian market.
The new JV will compete with the two major players called Tractor India, the Kolkata-based infrastructure equipment maker and Chinese firm Sanny Group in the segment.
Madan said at present the market size of the terrain cranes and truck-mounted cranes was pegged around Rs 400 crore and growing at about 15 per cent annually.
“We expect this market to grow to Rs 700-Rs 800 crore within five years,” he said, adding that there was a huge potential in overseas markets in Africa, the Middle East, South East Asia and Saarc counties.
“The growth in infrastructure development, metros and construction will drive sales of all kinds of cranes in India,” Madan pointed out.
The joint venture will leverage the cost effective frugal Indian engineering excellence of Escorts and world leading Japanese technology from Tadano to cater to an expanding market for heavier capacity and efficient Truck and RT Cranes and sophisticated truck mounted and rough terrain cranes in the 20 to 80 tonnage category.
“The new joint venture will cater to market demand for smarter, safer and bigger mechanised infrastructure solutions in the higher tonnage category. This will also reinforce our leadership in construction equipment space,” Nikhil Nanda, chairman and managing director at Escorts said.
Koichi Tadano, president and chief executive officer at Tadano said the joint venture will cater to India and other growing economies with safe, efficient and quality products and smarter construction technology. The joint venture would also enable both partners to optimise their current and future capabilities in the segment globally.