Western Australian-based composites technology developer Quickstep Holdings Ltd has announced plans to form a joint venture to pursue manufacturing opportunities in India and Australia, and establish a manufacturing centre in India.
Western Australian-based composites technology developer Quickstep Holdings Ltd has announced plans to form a joint venture to pursue manufacturing opportunities in India and Australia, and establish a manufacturing centre in India.
The joint venture partners are New Delhi-based NTF Private Ltd and Japanese group Avanti Corporation Ltd, who in May both signed a memorandum of understanding with Quickstep to utilise Quickstep's composites manufacturing technology.
Under the joint venture, which is for the manufacture of railcar interiors and exteriors, Quickstep will take at least a 44 per cent ownership stake, and the parties will fund the joint venture in accordance with their ownership entitlements.
NTF will manage the joint venture on a day to day basis.
Specifically, the joint venture has identified and is now bidding on specific manufacturing opportunities in India and Australia.
Success in obtaining contracts will see the establishment of a Quickstep manufacturing facility in New Delhi.
Opportunities have also been identified in Japan and Australia and Quickstep will be submitting a bid on an Australian contract by the end of July 2006.
With the Indian joint venture, Quickstep will supply a production machine and will also complete further test work in Perth on sample parts and provide technicians to manage commissioning of the Indian facility.
NTF has already built tooling required to manufacture sample parts, and will provide staff for the facility, which will include both existing NTF employees as well as additional local labour.
Quickstep's move into India represents a further important step in the global commercialisation of its manufacturing technology.
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QUICKSTEP TO FORM INDIAN MANUFACTURING JOINT VENTURE
- Original MOU (April 2006) for new low-cost Indian manufacturing centre being upgraded from royalty participation to joint venture participation
- The parties are already bidding on international projects
- Aiming to win initial multi-million dollar contract by end of August 2006 for fire and smoke retardant railcar interiors
- Production expected to commence in New Delhi by November 2006
- Joint venture extends Quickstep's market presence and provides established, local marketing and delivery partners in the Indian and Japanese markets, with an initial focus on mass transit systems
Quickstep Holdings Limited (ASX QHL-Quickstep) has announced its intention to establish a low-cost manufacturing centre in India. In conjunction with a leading Indian composites component manufacturer and a first tier Japanese supplier, Quickstep has reached an in-principle agreement to form a joint venture using Quickstep's proprietary technology and equipment.
The joint venture partners have identified and are now bidding on specific manufacturing opportunities in India and Australia. There is an immediate multi-million dollar opportunity in India's rapidly growing mass transit and infrastructure sectors relating to the manufacture and supply of interior panels for rail coaches made from advanced composite materials. Success in obtaining contracts will see the establishment of a Quickstep manufacturing facility in New Delhi.
Opportunities have also been identified in Japan and Australia and Quickstep will be submitting a bid on an Australian contract by the end of July 2006.
The joint venture is with New Delhi-based NTF (India) Private Ltd ("NTF") and Japanese-based Avanti Corporation Ltd ("Avanti"). Quickstep will have at least a 44% ownership stake. The parties will fund the joint venture in accordance with their ownership entitlements. NTF will manage the joint venture on a day to day basis. The structure of the Joint Venture and associated agreements are now being formalised.
This joint venture is specifically for the manufacture of railcar interiors and exteriors. Expansion beyond this market focus will be subject to negotiation amongst the parties.
Under the terms of the joint venture, Quickstep will supply an initial Quickstep QS20 production machine by 31 October 2006. Quickstep will also complete further test work in Perth on sample parts and provide technicians to manage commissioning of the Indian facility by 30 November 2006.
NTF has already built tooling required to manufacture sample parts, and will provide staff for the facility, which will include both existing NTF employees as well as additional local labour.
Quickstep's CEO, Mr Nick Noble, said forming a Joint Venture with NTF and Avanti represented the most effective way for Quickstep to target the immediate opportunities in the Indian and Japanese mass transit and infrastructure sectors. The joint venture also provides a foundation to pursue other opportunities for the Quickstep manufacturing process.
"The Joint Venture partners have already had very encouraging discussions with a number of key potential customers in the mass transit sector, and we expect that the first project undertaken by the Joint Venture group will be a multi-million dollar contract to manufacture and supply interior panels for rail coaches for contracts in the mass transit sector," he said. "We have submitted a bid in India and hope to make an announcement in regard to our first project within weeks."
"The New Delhi facility offers the opportunity to establish an international standard global manufacturing centre with a low cost base, leveraging off the country's highly competitive labour costs. India has some of the lowest comparative skilled labour rates of anywhere in the world - some US$0.95 to US$2.00 per hour in 2005, compared with US$23.00 per hour in Australia, US$23.10 per hour in the USA and US$34.00 per hour in Western Europe," Mr Noble added.
Mr Noble said the new manufacturing venture would also immediately target value-added opportunities, such as the manufacture of flat panels using a relatively new thermoplastic range of reinforced high-performance composites suitable for use with the Quickstep Process. Because of their lower cost relative to other advanced composites (such as carbon fibre prepregs) these new materials, when used in conjunction with the much increased productivity offered by the Quickstep Process, could open up significant new market segments for the Company.
"In addition, we will explore the possibility of transferring to India part of the manufacturing for Flatout Boats, our recently purchased niche boat-building business. First production is scheduled to commence in Perth during August this year," he added.
Quickstep's move into India represents a further important step in the global commercialisation of its manufacturing technology. The Company already has pilot production facilities in Japan; at the Victorian Centre for Advanced Materials Manufacturing (VCAMM) at Geelong; and at the Northern Aerospace Technology Exploitation Centre (NATEC) in Manchester, England in conjunction with the University of Manchester.
Quickstep recently announced a further extension of its global network through a collaboration agreement with America's National Composite Center to establish a demonstration centre in Dayton, Ohio, the birthplace of the aircraft industry.
