Deals in January-February, 2018

We, at Words Kshetra, helped several big companies enter into joint ventures and mergers worldwide. These companies were from diverse sectors and their reasons for joining hands were quite diverse too.

Here is a quick recap of what happened in these two happening months:

India’s Cotton and Linen Producer Enters into Joint Venture with German company

India-based company that produces Linen and Cotton has entered into a joint venture with a Germany-based company as a supplier of materials. Indian company has 30 years of experience in the market while the German company has been doing business for about 12 years. Through the JV, the Indian company will get an opportunity to enter the European markets and bring about changes in the way textile industry works in India and abroad.

Product Specification:  Cotton and Linen. 

Why make Joint Venture?

This joint venture can affect German as well as European textile market. Since the Indian company is already well-established, it is expected to give a tough competition to Spanish companies in Germany and Europe in general. By joining hands, both German and Indian companies aim to spread their business and make profits for next 10 years at least.

How will it affect the future of India’s Market?

The deal with the German company is expected to benefit Indian production in the long run. The German company hopes to gain an edge in not only the German market but also in the European market. With the e-commerce market picking up in Germany, the JV might also focus on customers who buy clothing online.

Spain-based Automobile Parts Manufacturer Joins Hands with Vietnam-based Company

An 8-year old automobile parts manufacturer from Spain has entered into joint venture with a 27-year old Vietnam-based company. The Spanish company has the distinction of being 8th largest automobile manufacturer in the world and 2nd largest automobile manufacturer in Europe. The Vietnam-based company is facing hard competition from companies from Japan, Korea and China.

This joint-venture is a win-win situation for both the companies as it is expected that very soon, the demand for automobile machinery will increase substantially and the competition-level in the industry will touch an all-time high too. Both the companies hope to create a prospective future through his JV.

Product Specification: Transportation Vehicles Parts.

Why Make Joint Venture?

Vietnam-based company is getting a good support from the Vietnamese government to pull the automobile industry up in the country. It hopes to achieve that through this joint venture. The Spanish company, on the other hand, is trying to build up a secure future where it can become sustainable against hard competition it is already facing (which is expected to increase in the near future).

How will it affect the future of Automobile Parts Market in Vietnam?

Vietnam's auto sector is facing a crunch right now. With rapid economic growth in the last decade, more and more consumers are looking to buy automobiles. The government wants to encourage its consumers to buy domestic automobiles. The challenge is that the auto production industry in Vietnam is still at a nascent stage and hence, development of the auto parts industry will take time too. With this joint venture, the Spanish company hopes to find a new market in Vietnam.

Taiwan-based Education Portal Ties Up with India-based Education Institute

Taiwan-based start up firm has joined hands with the Indian institutes which have years of experience in offering IT and Language courses.

In Taiwan, there is a very big market of students who want to opt for these courses. Every second youth is keen to master English and many want to be prepared for the IT world of the future. In fact, Taiwan is at #5 in the list of Asian countries whose students want to study in foreign universities and work in the IT sector.

The joint venture is going to launch a portal which will offer world-class education to Taiwanese students and help them in building a career in the international market.

The Indian institute is already well-known for their international-level education and its students have already set a high benchmark by playing important roles in IT giants like Accenture, Capgemini, IBM and Microsoft.

Service Specification: Information Technology and Language Courses.

Why make Joint Venture?

Taiwan-based entrepreneurial portal hopes to enlist quality expertise in the fields of IT and language training that is customized for the Taiwanese markets. It is a unique concept and is expected to get a highly positive response in Taiwan. The Indian institute hopes to offer quality education to the students abroad and change their lives for better.

How will it affect the future of Education Market in Taiwan?

The number of Taiwanese students going abroad is seeing a rise recently. The United States continues to be number one destination for Taiwanese students going overseas but Japan and Australia have also become increasingly popular as study abroad destinations in Taiwan - partly due to their working holiday programs. Hence, English language courses are becoming increasingly popular in Taiwan (where Mandarin Chinese is the official language).

The IT sector which offers higher salaries is also wooing a lot of Taiwanese youth. IT courses and language courses in India are considered world-class. Hence, it is expected that Taiwanese students will be able to avail quality education at an affordable price through the upcoming education portal.

Sweden-based Agricultural Company Makes Joint Venture with Brazil-based Company

17-year Brazilian company which is a large producer of soybean, maize, and rice has entered into a deal with 12-year old Swedish company which is doing business in Sweden and Gulf countries.

Brazil's economy is largely based on its agriculture. It is the world's largest exporter of soybeans, the largest producer of rice in Latin America and the Caribbean, and the maize production is expected to be up by 30% this year. Naturally, the Brazilian company is looking for companies to whom it can supply its produce. The company from Sweden stands to gain from the steady supply and will be able to expand its market share in the countries where it is doing business.

Product Specification: Soybean, Maize, and Rice.

Why make Joint Venture?

Through this joint venture, Brazilian company can reach out to Sweden and Gulf countries as a supplier and expand its business, while Swedish company can find a reliable partner to streamline its supply line.

How will it affect the agriculture market of Brazil?

Though Sweden is one of the largest countries in the European Union, Sweden has very little land fit for agriculture. Hence, its domestic production of rice, maize and soybean is quite less and is dependent on agricultural imports. Brazil with its agricultural excesses can find a good market in Sweden.

Philippines-based KPO Company Joined Hands with Bahrain-based Company

11-year old KPO company from Philippines has entered into a new venture with a Bahrain-based group of companies to start a KPO service there. Philippines is known for its efficient and affordable KPO services. Businesses in Bahrain and Gulf countries stand to gain from this as they can cut down their costs on core business processes and focus more on their actual business.

Service Specification: Knowledge Process Outsourcing

Why make Joint Venture?

The company from Philippines has a decade of experience in offering KPO services. With this JV, it will be able to expand its business in Bahrain and other Gulf countries. The group of companies from Bahrain will be able to KPO services to other businesses in its country – and help them reduce their costs considerably.

How will it affect the KPO industry of Philippines?

Philippines enjoys an 'elite' status in the global outsourcing stage. KPO or Knowlege Process Outsourcing industry is gaining prominence in the country now. In the KPO industries, the outsourcing companies handle core data-based business activities for its clients. These may include market research, equity research, fraud analytics, investment banking, data integration, remote education, project management and many such services.

KPO industry in Bahrain, on the other hand, is at a nascent stage. Philippines can help Bahrain reduce its cost on core business processes and make them more efficient.

India-based IT Company Joined Hands with Hungary-based Company

9-year old IT company from India has entered into new joint venture with 5-year old company from Hungary in the field of data security and cloud computing. The Indian company is hoping to learn new expertise in IT fields like data security and cloud computing in which Hungarian company has already carved out a name.

Product Specification: Data Security and Cloud Computing.

Why make Joint Venture?

The Hungarian company hopes to crack the burgeoning Indian market while the Indian IT company hopes to reinvent itself through this joint venture and adopt new and emerging technologies.

How will it affect the Indian IT industry’s market?

At present, Indian IT industry is looking to reinvent itself to stay relevant in the international market. In the last couple of years the Hungary's ICT sector has grown considerably. Many major IT companies have relocated their R&D initiatives to Hungary and the country has become a regional incubator for software development. Software developers from Hungary have achieved international success in emerging IT fields such as IT security, bioinformatics, cloud computing, and virus protection.

This joint venture will pave the way for India to gain new expertise from Hungary and upgrade its capabilities and offerings.


Please Note: More details about the joint venture and amount will be disclosed by the companies in their respective press notes. These are legal and confidential matters and we will not be able to reveal more at the moment.