Tata Motors, Hitachi, Telecon sign new agreement
December 9, 2005

Enhanced scope of cooperation; Hitachi increases stake to 40 per cent

Tata Motors, Hitachi Construction Machinery Co. Ltd. (HCM) and Telco Construction Equipment Company Limited (Telcon), an 80:20 joint venture company between Tata Motors and HCM, today signed an agreement, expanding their scope of cooperation and partnership with HCM increasing its stake in Telcon from 20 per cent to 40 per cent. HCM is a leading Construction Equipment manufacturer with a turnover of around US$ 5 billion. Widely accepted as the foremost in excavator technology, HCM has its own manufacturing operations in Japan, China, Indonesia, Netherlands, France and USA; and distribution network worldwide. Their participation reflects their confidence in the fast growing Indian market and their desire to be a part of the infrastructure building in the country as also to strengthen the relationship with the Tata Group.

The agreement was signed by R.N. Tata, Chairman of Tata Motors, S. Dazai, President and CEO of HCM and J.K. Setna, Chairman of Telcon.

The new shareholders’ agreement signed between the three companies envisages greater cooperation between HCM and Telcon. It includes sourcing, by Hitachi, of components and machines from Telcon, introducing newer products of construction equipment in India, setting up a product development facility in India and making Telcon a part of HCM’s global network. The new arrangement will help Telcon to significantly improve its product offerings to its customers and make it evolve as a global manufacturing and design hub.

Telcon was set up in 1999 as a wholly owned subsidiary of Tata Motors on the spin-off of the Construction Equipment Business Unit of Tata Motors. Subsequently, in 2000, Tata Motors inducted Hitachi into Telcon by divesting 20 per cent of its shareholding thereby enabling Telcon to have access to newer technologies and processes. Telcon is in the business of designing, manufacturing, assembling, selling, distributing and dealing in all services related to earth moving machinery and construction equipment with manufacturing facilities at Jamshedpur and Dharwad and a marketing and service network covering 65 towns in the country. Its product range presently includes hydraulic excavators, crawler cranes, wheel loaders, backhoe loaders, dumpers and motor graders. In the FY 2004-05, Telcon reported a gross turnover of Rs.926 crores and a PAT of Rs.40 crores. For the first half of FY 2005-06, Telcon reported a gross turnover of Rs.567 crores and PAT of Rs.28 crores. Backed by Tata Motors’ and HCM’s unmatched quality and support, Telcon holds a leadership position in the construction equipment industry in India.