Murugappa group’s Tube Investments (TII) has indicated that it is evaluating joint venture opportunities with Japanese firms. The company has been in talks with Japanese firms and is likely to take a call on its JV plan in a year.

Since Japan is bullish on India growth story, an increasing number of Japanese firms have been exploring potential business collaboration with Indian firms or setting up their own factories in India.

“For the past two years, a lot of Japanese companies have been talking to us. In terms of tooling design there are a lot of Japanese companies who want to associate with TII as a part of their JV programmes. There are auto ancillary companies specialising in design and tooling who are very keen to associate with us. Every month we are getting two or three leads, which we are exploring opportunities to form a JV,” according to K Balasubramanian, CFO, TII.

“We are not hesitant in doing any deal with Japanese firms, but we are cautious. We take things very, very seriously because JV partnership is for a long term relationship,” he said adding, “We are very careful about the selection of our JV partner. We have to see how the business opportunity spans out and we take a longer time in evaluating. We meet OEMs (original equipment manufacturers) and seek their perspective. The investment size could be Rs 30-40 crore. We are evaluating many leads, may be in a year’s time there will be some kind of concrete plan,” he added.

Meanwhile, the Rs 6,442 crore TII has chalked out a capex of Rs 500 crore for the financial year 2012-13. About half of it will be made to boost its non-auto business segments such as infrastructure. Around Rs 250 crore is earmarked for tube business and a new plant is being set up in south to produce large diameter tubes for infrastructure sector as part of the capex.

TII will spend Rs 130 crore in chains business to create more capacity. Further, the company will invest Rs 120 crore in metal-formed products and bicycles division and the budget will include investment in capacity ramp up in North.

TII has also drawn up plans to set up a factory for tubes in northern part of India. The company is presently scouting for land and hopes to complete the land acquisition process during this financial year. “We will start investing in terms of the building and plant equipment in the next financial year,” he said.