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Business News/ Companies / Amber, Titagarh Rail Systems in deal for train components business
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Amber, Titagarh Rail Systems in deal for train components business

The SPV will set up a new facility in India to manufacture critical railway components and subsystems used in the manufacture of railway and metro coaches

The SPV will set up a new facility in India to manufacture critical railway components and subsystems used in the manufacture of railway and metro coaches. Photo: MintPremium
The SPV will set up a new facility in India to manufacture critical railway components and subsystems used in the manufacture of railway and metro coaches. Photo: Mint

Titagarh Rail Systems (TRSL) of Kolkata and Amber group of Delhi joined hands to enter the railway component and subsystem business by forming a joint special purpose vehicle (SPV).

Both TRSL and Amber group, via its wholly-owned subsidiary Sidwal Refrigeration Industries Pvt Ltd, will invest approximately 120 crore each to obtain around 50% each in the SPV.

The SPV will set up a new facility in India to manufacture critical railway components and subsystems used in the manufacture of railway and metro coaches and will also make fresh equity investments into Titagarh Firema. Titagarh Firema SpA, Italy, is an associate company of the Titagarh group where govt of Italy is also an equity stake holder. The new SPV will also invest in Titagarh Firema while government of Italy will invest in the entity for which it has already taken approval from Invitalia, the Italians government’s investment arm. Under the agreement, Firema will grant Sidwal, Titagarh Rail as well as the SPV a preferred supplier status and right of first refusal (ROFR) for all their products.

Titagarh Rail is involved in the railway rolling stock space for both freight and passenger rolling stocks. Apart from being an established railway wagon and metro coach manufacturer, it is also currently executing the projects of Vande Bharat trains, Surat, Ahmedabad, Pune metros as well as executing its first export order for passenger rail components received from Firema. Titagarh is targeting a capacity of almost 800-850 coaches per year in the coming years.

The Amber group is a diversified B2B company having three business verticals: consumer durables, electronics and railway subsystems and mobility. Sidwal, an Amber group company, has emerged as a leader in the train air conditioner market and has also signed a technology licensing agreement with Ultimate group to manufacture passenger coach doors and gangways. Sidwal is also planning to enter the European market for its products portfolio, a company statement said.

The strategic partnership in Firema will not only facilitate Sidwal’s entry into the European market, but will also give Sidwal a preferred access to Firema’s own demand, the statement added.

Both companies are investing to grow capabilities and capacities for various products that can be exported to Europe such as train mechanical and electrical components by TRSL and HVAC, doors, gangways and pantry systems by Sidwal.

Firema is one of the largest and reputed designers and manufacturers of passenger trains in Italy and has executed marquee projects in Italy and other parts of Europe. Firema has an order book of almost euro 1 billion for producing new coaches and has an existing capacity to produce upwards of 240 coaches per year and has plans to double this capacity. 

Firema recently signed a framework contract for design and supply of 370 sleeping coaches to Trenitalia for euro 732 million (with an option of full service valued at about Euro 220 million) in consortium with Skoda apart from the trains for the Lazio (Rome) region.

Titagarh Rail and Sidwal will jointly support the growth of Firema via combined management expertise as well as improving cost competitiveness of Firema by supplying critical components from India which are produced by both the groups.

The groups are already in advanced stage of discussions for obtaining technology for making components, they would include coach interiors, coach toilets, kitchens, seats and other important railway subsystems.

Commenting on the deal, Jasbir Singh, chairman and CEO, Amber Enterprises, said, “This will be a game changer for Amber as not only will it give us a very strong foothold to make customer base globally, it will also give us a preferred access to the demands of one of the strongest and fast emerging rolling stock manufacturers in the country."

Umesh Choudhury, vice chairman and managing director of Titagarh Rail Systems, said, “Joining of a strong group like Amber with Firema will accord strength to the overall business development and growth of Firema and the fact that the Italian government has agreed to co invest is a strong sign of the importance of the venture".

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ABOUT THE AUTHOR
Subhash Narayan
Subhash is the infrastructure editor at Mint and tracks the momentous developments taking place in the space that is fast changing the Indian landscape. He feels that reporting has been a passion that provides the necessary adrenaline rush and keeps you going.
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Published: 25 Jan 2024, 03:07 PM IST
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