By setting up a 50:50 joint venture with the Bangalore-based Suprajit Engineering Ltd with a total investment of 1.5 million pounds (Rs.120 million), Carclo will be slashing production at its Litchfield unit in West Midlands from next year to a million cables as against 15 million cables presently.

"The proposed joint venture is being located at Doddaballapur, about 40 km from Bangalore, to manufacture 10-12 million cables a year for our customers like Jaguar, Rover, Toyota and General Motors in Europe," Carclo CEO Ian Williamson told reporters here Thursday.

As a result, the 110-million-pound Carclo will be moving 150 jobs to India from its group company CTP Gills, which manufactures control cables for the automotive industry.

"Though we are reducing production back home, we will continue to engage in design and research development at Litchfield. The relocation will enable us to reduce operational costs by 15-20 percent," Williamson said.

Carclo will make substantial savings by employing the Indian workforce, which is about 20-25 per cent cheaper than in Britain.

With India emerging as a major auto component hub due to skilled workforce and lower costs, global auto makers and ancillary suppliers have been increasingly outsourcing their requirements from domestic manufacturers, some of whom have set up dedicated plants for 100 percent exports.

To remain globally competitive and retain its margins, Carclo has decided to relocate its cable unit even at the expense of retrenching 70 percent of its total staff strength at CTP Gills.

Suprajit managing director Ajit Kumar Rai said the joint venture with Carclo is a fruition of the company's ability to supply world-class control cables to overseas customers besides major auto players within the country.

"Carclo has been outsourcing its cable requirements from us for the last three years, with the value of its order during the current fiscal (2004-05) at about Rs.40 million (500,000 pounds).

"When the new unit becomes operational by October 2005, our quantum of exports to Carclo will double," Rai told IANS on the sidelines of the announcement.

Besides equity, Carclo will bring in new technology to upgrade Suprajit's production facilities on the lines of the established European model of manufacturing to meet customer requirements.

Currently, Suprajit produces about 30 million cables from its six plants in and around the city for its domestic and overseas customers.

"Our exports are poised to grow exponentially from Rs.70 million presently once the commercial production in the joint venture takes off next year.

"We hope to break even during the first full year of operations in 2006-07 and post a turn over of Rs.400 million (5 million pounds)," Rai added.

The public listed company is targeting a revenue of Rs.1 billion by the end of the current fiscal as against Rs.820 million achieved during the last fiscal (2003-04).

--Indo-Asian News Service