INDIA BUSINESS WORLD - DECEMBER 16^th - DECEMBER 31^st - 2007

JCT TO ENTER WIND ENERGY, GETTING INTO JOINT VENTURE WITH DAKSHIDIN

Samir Thapar led JCT is taking its first major diversification beyond the traditional textile and filament yarn businesses. The group is getting into a 50:50 joint venture with Dakshidin Corp, which specialises in low wind speed windmills. The venture would mark JCT's entry into wind energy on a long-term basis.

Initially, the windmill-based water pumping products would be imported from Dakshidin's Chinese plant, but the venture is already studying options of setting up its own manufacturing facility in the country. Dakshidin, producers of the world's most powerful water pumping windmill, is also planning to bring its wind power generating products in the middle of 2008, which would then allow the Indian venture to get into small wind energy projects.

JCT vice-chairman and managing director Samir Thapar said: "We have been looking at various businesses and finally decided on renewable energy where our focus would be on wind energy."

He said the USP of the product would be its ability to operate at much lower wind speeds of even four miles per hour against conventional windmills which require wind speed of 15 miles per hour. Such high wind speeds are available in only particular regions within India and in just about 20% of the world. Our products can reach out to a much larger market," he added.

This means that JCT would not compete with large windmill producers like Suzlon. The exact business model to be followed with the new products is yet to be frozen, but it is likely to involve separate ventures with farmers for installing and operating the windmills.

Renewable energy sources such as wind, solar and water (hydro) is attracting increasing investor interest as alternative forms of energy. With crude trading at historic highs and increasing concerns of pollution from conventional sources of energy, more corporates are getting into the field.

The Rs 550-crore textile and nylon filament yarn maker, JCT, is part of the MM Thapar group, one of the four sons of the late group founder Karamchand Thapar. While other groups of the former diversified Thapar family had been exploring new business ventures, JCT has been largely confined to textiles. This venture is part of a bigger push into diversification.

The exact financial and technical feasibility for the manufacturing set-up and the equity structure is going to be finalised within the next two months. While the initial MoU for the venture has been signed by JCT, it is possible that some privately held companies may pitch in with investments for the 50% stake in the venture.

JCT has held some preliminary discussions with the Punjab government for installing windmills on an experimental basis. This would be taken forward in other states as well, given the fact that the high performance water pumping windmills can be used in arid and desert land such as those in Rajasthan as also other parts of the country.