Eurozone crisis won’t affect European business’

Kolkata, July 16 (IANS) In face of the Eurozone crisis, Titagarh Wagons Ltd (TWL) on Thursday said it is eyeing a larger chunk of business from Europe, Africa and the Middle-East after its recent acquisition of the Italian high-speed train-maker Firema Trasporti SpA.

The acquisition will also enable the Indian locomotive player to foray into manufacturing of metro coaches and high-speed trains in the domestic market.

The company has floated a special purpose vehicle — Titagarh Firema Adler SpA — in collaboration with Adler Plastics where the former holds a 90 percent stake while the Italian firm holds the remaining 10 percent.

Asked about the prospects of the SPV in the face of the Eurozone crisis, TWL chairman J.P. Chowdhary said: “Our French subsidiary has been performing well in face of the Eurozone crisis. While at a macro-economic level, the situation is bad, we have seen good growth.”

He said that in the ongoing financial crisis in Europe, while some large companies in the wagons space have taken a hit, at least four mid-sized companies were doing “good” business.

The company’s vice chairman and managing director Umesh Chowdhary said the SPV’s order book at the time of acquisition stood at Euro 220 million. The orders are to be executed in a one-year timeframe.

“The company (Firema Trasporti SpA) had potential but was focusing on the Italian market only. Our aim is to use its full potential and focus on the entire European region, Africa and the Middle-East,” Umesh Chowdhary told media persons here.

He said the SPV doesn’t need any subsidies from the Italian government, except in R and D, for a turnaround in its revenues or profits.

TWL has already invested Euro ten million in the acquisition process and has plans of another Euro 15 billion investment in the SPV.

The acquisition, however, has led to a job cut of over 160 employees of Firema Trasporti SpA.

“We needed the nod of the labour unions of Firema Trasporti SpA to finalise the deal which had went smooth. We have received cooperation from the unionsa,” Umesh Chowdhary said.

He said TWL will look out for local capital in the near future to grow its Italian business.

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