By IANS
Ahmedabad : Zhejiang Longsheng Group Company Ltd (Lonsen) of China, which has entered into a joint venture with city based Kiri Dyes and Chemicals Limited (KDCL) with an investment of $10 million for dyestuff manufacturing, could step up its investment to about $35 million, a KDCL official said.
Currently, the Chinese company’s $10 million investment represents a 7.5 percent stake in the joint venture whose shareholding pattern will be in the ratio of 60 percent for KDCL and 40 percent for Lonsen.
Manish Kiri, managing director of KDCL, told IANS: “The investment by the Chinese company is initial investment. It will increase as the joint venture grows in size. Ultimately, Lonsen’s investment could touch $35 million.”
Lonsen is one of the largest private sector producers of dyestuff in China and the joint venture with KDCL will manufacture reactive dyes but could later diversify into manufacturing new chemical products. The plant will be located at Vadodara and have an initial manufacturing capacity of 20,000 tonnes a year.
Manish said the joint venture materialised due to two factors. One was that China was now pursuing stringent environment regulations. As a result, many Chinese firms were looking to having manufacturing bases outside the country. Moreover, export rebates granted to industries in China have been withdrawn.