JIKL: joint venture with Lindshammar

Indian hand-made crystal glassware producer JIK Industries Limited (JIKL) said 8 March 2006 that it would set up a joint venture company with Sweden“s Lindshammar Glassbruk AB to execute its capacity…

Indian hand-made crystal glassware producer JIK Industries Limited (JIKL) said 8 March 2006 that it would set up a joint venture company with Sweden“s Lindshammar Glassbruk AB to execute its capacity expansion plan. JIKL, the only player in the organised sector in India, aims to increase its capacity to 4.5 to 5 tonne per day from the current level of one tonne per day with an investment of INR 400 million. “In the new company, JIKL will have 51% stake, while the rest will be evenly shared by Lindshammar and a venture capital fund from Sweden,” company Vice President (Finance) Aditya Parikh told reporters. However, JIKL could increase its stake in the company to 76% in the future, he said. JIKL, which entered the field eight years ago, has had Lindshammar as its technological collaborator from the start. According to the Memorandum of Understanding, Lindshammar would outsource 90% of manufacturing, he said. “The labour cost for hand-made crystal product in Sweden is a few times higher than India. That is why this makes sense for the company to acquire a stake in JIKL,” Parikh said.