Warburg Pincus-backed QuEST Global’s group firm QuEST Global Manufacturing has signed a joint venture agreement with Swedish defence and security major Saab to set up an aerostructure assembly joint venture. As part of the agreement, Saab will hold 26 per cent stake in line with its objective to strengthen its strategic presence in India.
The new entity, Aero Assemblies India, will be located in Belgaum in Karnataka, where QuEST Global manages a fully operational special economic zone and houses the QuEST Global Manufacturing division.
Facilities for the joint venture will be developed through 2013 and the unit will initially become operational with about 50 employees, which is expected to ramp up to over 400 in the near future.
Aravind Melligeri, co-founder and chairman of QuEST Global, said, “This joint venture with Saab is a clear indication of our impetus in the aerospace sector and promises to go a long way in enhancing our aerospace ecosystem within the SEZ at Belgaum. This milestone also promises to unveil new vistas in aerospace manufacturing, while providing India with the added global exposure and expertise in this sector.”
The new entity will be focused on build-to-print assemblies for the emerging market opportunities in India. In addition to this, its long term goal will be to emerge as an independent unit that would become a cost effective solution provider of choice in the aerostructure assemblies space.
This partnership between the two companies will see knowledge transfer to develop capability building for assembly, tooling, material and supply chain as well as technical training for assemblies and sub-assemblies.
“This partnership will provide a cost-efficient and reliable source of assemblies acting as a complement to Saab’s in-house manufacturing. This is a long-term commitment in a strategically important market for Saab and it further establishes Saab as a global player in the commercial aerostructures market,” according to Kjell Johnsson, Head, Aerostructures, Saab.
QuEST Global is a provider of engineering and manufacturing solutions in the aerospace and defence, aero engines, power generation, industrial products and oil and gas domains. QuEST Global Manufacturing is a provider of precision machining, sheet metal fabrication and assembly solutions to the aerospace, automotive and oil and gas markets.
In December, 2010, private equity firm Warburg Pincus had invested $75 million in QuEST Global.
For Saab, this would be second such JV in India with a PE-backed group. In August, it struck a deal to invest $38 million in IL&FS PE and Jacob Ballas-backed Pipavav Defence and Offshore Engineering.
(Edited by Prem Udayabhanu)