TVS and Novotema form a joint venture for elastomer products
Milan, 11 October 2007 . Sundaram Industries, a member of the TVS Group, India’s leading supplier of automotive components and Novotema S.p.A (“Novotema”), one of the leading producers of precision sealing and rubber components in Europe, have announced the creation of a Joint Venture for the manufacturing and distribution of a range of specialty elastomer parts for sealing applications in India.
“Asia and India in particular provide significant opportunities for European businesses – says Costanzo Pederzani, CEO of Novotema. India is already being used as a base for manufacturing at low cost. The real challenge for European companies is to build a local manufacturing and distribution presence in order to serve the growing Asian market. Ourjoint venture will allow us to combine the benefits of the advanced technological expertise of Novotema with the local presence and operational knowledge of Sundaram in order to meet the requirements of the Indian market. This is a market which is growing extremely quickly and is building very high expectations in terms of quality of products, delivery and costs.”
Novotema, based in Villongo (near Bergamo, Italy) is a leading manufacturer of specialty elastomer parts with a large presence in the European market. Novotema specialises in the manufacturing and production of technologically advanced rubber products for a variety of applications that include automotive, electro-mechanical, water distribution, food and beverage, hydraulics, pneumatic, gas and household appliances. Years of research have made Novotema a quality solution provider for engineered elastomeric products for sealing applications.
Lorenzo Salieri, Partner of 3i Italy said: “In an economic environment where large multinational companies tend to improve competitiveness through the acquisition of small businesses, the Novotema – Sundaram joint venture is a positive exception; the small Italian “David” becomes an ally of the giant Indian “Goliath” and together they embark upon a new path towards a new market”.
Novotema, led by the CEO Costanzo Pederzani, is currently owned by the management and the private equity fund 3i. Thanks to the support of its local Indian team 3i assisted Novotema during the process of defining the terms of the joint venture agreement and helped identify the best local strategic partner. 3i has built a strong expertise in assisting 3i portfolio companies in establishing a presence in Asia through its local network of offices.
This strategic joint venture is another step in Novotema’s growth strategy and follows an intense period of organic growth since 2003, during which the company completed the acquisition of competitor FabelGom in 2006. In 2007 Novotema is expected to post consolidated sales of €40 mln.
Sundaram Industries Rubber Division, part of TVS Group – is a leader in the moulded rubber products with consolidated turnover of US $3 billion. The division specialises in the manufacture of quality rubber products from its facilities in Madurai and Gurgaon, serving a wide spectrum of applications including automotive, industrial, railways and other sectors. The company has won various Awards for Excellence in Manufacturing and Quality from organisations and customers across the globe. Sundaram Industries, branded as TVS RUBBER, also won the TPM Award for Operational Excellence in 2004 and the TPM Consistency Award last year.
Both partners have chosen the temple-city of Madurai, to set up new premises with modern equipment and infrastructure. The facility will have a high degree of automation to ensure high productivity and reliability of products.
Notes to editors
Founded in 1973 in Villongo, close to Bergamo, Novotema supplies technical rubber and silicon products (such as o-rings and shaped elements) to the automotive, home appliances, hydraulics, and pneumatics sectors.
The company carries out the whole production cycle, from own project or co-design procedures to the final manufacturing of the item. Main activities include: engineering, moulds manufacturing, compound formulation and preparation, moulding, final test and certification.
The TVS Group is India’s leading supplier of automotive components and one of the country’s biggest conglomerates. TV Sundaram Iyengar and Sons Limited, founded in 1911, is the holding of TVS Group, with a yearly turnover of over US$ 450 million and over 5000 employees.
3i is a world leader in private equity and venture capital. We focus on buyouts, growth capital and venture capital and invest across Europe, in the United States and Asia. Our competitive advantage comes from our international network and the strength and breadth of our relationships in business. These underpin the value that we deliver to our portfolio and to our shareholders.