TOKYO (Jan. 25, 2011)— India's Larsen & Toubro Ltd. and Kobe Steel Ltd. have formed a 51-49 joint venture, controlled by L&T, to make and sell rubber processing machinery for the tire industry. The joint firm will be called L&T Kobelco Machinery Pvt. Ltd. and will specifically target European markets, as well as India and Russia.
The joint venture will make rubber mixers and twin screw rollerhead extruders used in manufacturing tires. Plans call for construction of the plant to begin in February 2011 and production to begin in October. About $11 million will be invested in the facility.
The company will be managed by a board of directors comprising nominees from Kobe and L&T.
In 2003, Kobe Steel began providing Larsen & Toubro with technology to produce tire curing presses, building a solid relationship over the years. A strategic partner of Kobe Steel in India, Larsen & Toubro is India's top manufacturer of tire curing presses and has a strong sales network in India, Europe and the Middle East.
The new joint venture, making full use of this sales network, plans to market its products in India, Europe, the Middle East, Africa, Russia and Eastern Europe, where to date Kobe Steel has had relatively low sales. Annual sales are anticipated to reach $45 million in the 2014-15 fiscal year.
Kobe Steel makes tire and rubber machinery in three countries. Besides Japan, its Kobelco Stewart Bolling Inc. business makes rubber mixers and twin-screw extruders in Ohio, while its Yiyang Yishen Rubber Machinery Co. Ltd. unit makes tire curing presses in China.