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Home arrow News arrow Business News arrow IFC to invest in Craftsman Automation's new projects
IFC to invest in Craftsman Automation's new projects Print E-mail
Written by Krishna Kumar   
Friday, 21 May 2010
Chennai: The International Finance Corporation (IFC) proposes to invest upto $37 million (Rs 162 crore) in Coimbatore-based Craftsman Automation Pvt Ltd, to fund it'd project that involves the setting up of up to four new units in strategic locations close to Original Equipment Manufacturers (OEMs) and their subsidiaries in the commercial vehicles and tractors segment.

These new units will provide machining services to the OEM’s and their subsidiaries. In addition to the new units, the Project will also involve the expansion of the Project Company’s existing facilities in India.

The IFC Board decision on the transaction will be finalised at its meeting scheduled to be held on June 18.

The Project will result in the creation of around 600 direct jobs and 300 indirect jobs over the next three years. Craftsman's investments in Jharkhand and Madhya Pradesh will result in increased employment and enhance the skill sets of local personnel.

The new units and expansions will be spread out over a two year period based on estimated business pipeline and the total cost would be up to $37 million. IFC’s investment will be in the form of straight equity/quasi equity investment in the Company to part finance the Project and to support the growth of the Company.

The new equipment purchased will be used at Craftsman’s existing facilities in India: Coimbatore, Chennai, and Sriperumbudur located in the state of Tamil Nadu in the southern part of India, Pithampur in the state of Madhya Pradesh in central India and Jamshedpur in the state of Jharkhand in the eastern part of India. New units will be set up in strategic locations close to the OEMs and their subsidiaries.

Srinivasan Ravi owns 75% of the Company and serves as the Managing Director. Srinivasan Murali (Mr. Ravi’s brother) owns 15% and Mr. Kaliappa Goundar Gomatheswaran, director of the Company, owns the balance 10%.

IFC's investment will help attract other potential investors especially during the IPO process. The IPO will give the Company wider access to additional long-term capital to finance its growth strategy. It will assist the company to to transition from a closely-held family business to a well-governed corporate entity.

Craftsman Automation Pvt. Ltd, incorporated in 1986, is an engineering company with a diversified business mix involving, machining of critical parts for domestic OEMs in the commercial vehicles, tractors segment, contract manufacturing of assemblies and sub assemblies for various sectors like automotive, textiles, printing machines, locomotives for both domestic and export markets, and manufacture of products such as industrial gears, hoists, marine products. Currently, the Company has three manufacturing units in Coimbatore, and four units that provide machining services at Chennai, Sriperumbudur, Pithampur and Jamshedpur.

Craftsman Automation has a subsidiary in the Netherlands that sells marine products. It has a joint venture with Carl Stahl International Gmbh, Germany, to develop and market material handling equipment and another one with Mitsubishi for selling their laser cutting machines.

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