Tatas give up stake in Tata-Timken Ltd
By S. Choodamani | 09 Mar 1999
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The Timken Company of the United States will acquire a controlling stake in Tata Timken Ltd, manufacturer of tapered roller bearings. The US company will purchase the Tatas' 40 per cent holding in the joint venture to take its own stake to 80 per cent. Tisco will get about Rs 117 crore for the sale. The balance 20 per cent will remain with the public.
Tata Timken started its operations in 1992. The Tatas had invested Rs 26 crore in the venture through the Tata Iron and Steel Company, which saw prospects of selling its alloy steel to the new bearings maker. The venture is the second largest manufacturer of tapered roller bearings in India.
But bearings are a difficult business. The company accumulated losses of Rs 50 crore by the end of 1994-95. This figure was brought down to Rs 15 crore in 1997-98. Turnover in that year was Rs 140 crore, and net profit Rs 13.5 crore.
Tata Timken has an installed capacity of 3 million units (standard bearings and bearings for trucks, utility vehicles and railways). The company undertook a Rs.32-crore expansion programme, which was completed in March 1998. Its technical and research centre at Bangalore was set up at a cost of Rs 6 crore. The company has plans to invest an additional Rs.15 crore in expansion. Acquisition of the Tatas' stake in the joint venture is in line with Timken's approach the world over. The group's acquisitions include MPB Corporation (now Timken Aerospace and Super Precision Bearings), Desford Steel Tubes and Latrobe Steel Company (now Timken Latrobe Steel). Timken is the global leader in tapered roller bearings used in automobiles and trains.
The Tata gruop has clarified that it has withdrawn from the joint venture in order to concentrate on its core competence. Greater control will also encourage Timken to bring in new technology. The decision to part was mutual. The company will be renamed Timken India Ltd. The composition of the board will also change.
Tata Timken started its operations in 1992. The Tatas had invested Rs 26 crore in the venture through the Tata Iron and Steel Company, which saw prospects of selling its alloy steel to the new bearings maker. The venture is the second largest manufacturer of tapered roller bearings in India.
But bearings are a difficult business. The company accumulated losses of Rs 50 crore by the end of 1994-95. This figure was brought down to Rs 15 crore in 1997-98. Turnover in that year was Rs 140 crore, and net profit Rs 13.5 crore.
Tata Timken has an installed capacity of 3 million units (standard bearings and bearings for trucks, utility vehicles and railways). The company undertook a Rs.32-crore expansion programme, which was completed in March 1998. Its technical and research centre at Bangalore was set up at a cost of Rs 6 crore. The company has plans to invest an additional Rs.15 crore in expansion. Acquisition of the Tatas' stake in the joint venture is in line with Timken's approach the world over. The group's acquisitions include MPB Corporation (now Timken Aerospace and Super Precision Bearings), Desford Steel Tubes and Latrobe Steel Company (now Timken Latrobe Steel). Timken is the global leader in tapered roller bearings used in automobiles and trains.
The Tata gruop has clarified that it has withdrawn from the joint venture in order to concentrate on its core competence. Greater control will also encourage Timken to bring in new technology. The decision to part was mutual. The company will be renamed Timken India Ltd. The composition of the board will also change.
