New Delhi: Rail freight car manufacturer and engineering services firm Texmaco Rail & Engineering Ltd on Monday said its joint venture partner Australia-based UGL Ltd has initiated a discussion to exit from the JV due to drying up of orders in the Australian market.
"In view of downturn in locomotive sales in Australia impacting throughput volume of UGL, the JV facility, Texmaco Rail Pvt Ltd, which was set up in India primarily for catering to the requirements of Australian market through UGL, is starved of orders and not able to operate to its potential," Texmaco Rail & Engineering Ltd said in a BSE filing.
It further said: "In view of the above, UGL has initiated discussion about the future of the project including their view to exit from the joint venture. The matter is under active consideration."
Texmaco Rail & Engineering Ltd added that there will be "no material impact on the company as the unit was commission on April 1, 2013 and in view of the market conditions in Australia, the unit has been operating below capacity."
In December 2010, UGL Ltd announced that it has formalised a joint venture agreement with Texmaco Rail & Engineering Ltd.
Texmaco and UGL decided to jointly establish a manufacturing facility at Texmaco's facility at Belgharia, in Kolkata. Texmaco UGL commenced commercial production in 2013.
PTI
First Published: Monday, September 7, 2015, 13:30