Kobe Steel, L&T form JV for tyre machinery

MUMBAI: Larsen & Toubro has inked a joint venture agreement with Japan-based Kobe Steel for manufacturing equipment for the tyre and rubber industry for global market with a total investment of Rs 60 crore. L&T will hold 51% stake in the JV.

“This joint venture will compliment our current portfolio of equipment for tyre and rubber industry,“ S Raghavan, senior executive vice-president, told ET.

“The auto industry is poised to grow four times by 2020. With this, we will have an automatic demand for tyres and replacements. We see a lot of growth potential in this segment," Raghavan said.

In the first 4-5 years of operations, the joint venture aims to sell 50-60 % of its output in India, and export the rest. "The joint venture would sell products in all geographies except US and Japan, where Kobe already has a presence. We are also not keen at looking at the Chinese market,“ Raghavan said.

Engineering major L&T currently has a Rs 400 crore business of selling equipment for tyre building and curing. With the joint venture, the company would manufacture and sell internal mixers, a machine used for mixing rubber, and twin screw rollerhead extruders, a machine used for converting rubber into consistent and continuous profile.

L&T already has a collaboration with Kobe Steel for manufacturing hydraulic tyre curing presses.