Ahmedabad, Nov 06 (UNI) City-based Kiri Dyes&Chemicals Limited (KDCL) has inked a Memorandum of Understanding (MoU) with world renowned Chinese chemical giant Zhejiang Lonson for setting up a joint venture with an initial investment of US $ 10 million.
Talking to mediapersons here today, Director (International Operations) of KDCL, Mr Manish Kiri said ''Lonson or his affiliates will hold 60 per cent equity share in the new joint venture and rest 40 per cent equity shares shall be held by the KDCL and its affiliates.'' Mr Kiri said the entire investment of US$ 10 million towards initial capital investment will be done over the two financial years, 07-08 and 08-09, with internal generation of resources and IPO funds will not be used for the purpose.
However, he said that for subsequent fund requirements, both the parties will raise resources in proportion to their share holdings.
The JV will start with an initial production capacity of 20,000 tonnes a year of reactive dyes. The capacity could be enhanced upto 50,000 tonnes per annum after successful execution of the project.
According to Mr Kiri the joint venture is expected to become operational by the end of the year 2008.
''A key feature of the MoU is that both parties will work jointly to invest in the new projects, plants or organisation for future growth to increase return on investments for both the Joint Venture partners globally,'', he said.
As a long term strategy, Lonson and KDCL will identify specific projects on which both will invest and develop a long term strategic tie-up.
The KDCL will prepare a road map to establish procedures to execute the JV starting from incorporation of the new company to the implementation of the joint venture.
Mr Kiri said the joint venture company will be managed and operated by the KDCL as it is a local partner for all operational functionalities.