PRIVATE EQUITY player GW Caps will fund Rs.50 crore for Gala Precision Technology’s expansion in India, Northeast Asia and the European Union.

Gala Precision Technology, a manufacturer of engineering components for compressor and the automotive industry, plans to build a plant in Fengxian, near Shanghia, China. The plant scheduled to come online sometime early next year, would be fabricating compressor valves for Gala’s clients in Northeast Asia.

Speaking to Hindustan Times, Gala’s Managing Director Kirit Gala said he plans to invest Rs.150 crore in capex, of which Rs.70 crore would be in India, and Rs.20 crore in China and the remaining Rs.60 crore would be kept as reserve.

The company expects to attain a turnover of Rs.350 crore over the coming five years, driving the growth rate over 53 per cent. The acquired funds from GW Caps would be channelled into its plant installations in Wada, near Thane, and Fengxian.

The reason for choosing Shanghai as a manufacturing destination, said Gala, is proximity to the large Northeast Asian markets. “China, Korea, Taiwan are big markets, and we need to be close to our clients, who have come into the region in a big way.” Clients for Gala precision include manufacturers such as Sanyo and brake manufacturer Knorr- Bremse.

Further Rs.60 crore kept in the reserve would be used for the company’s acquisition plans. “Organic growth is just not enough. We need to constantly acquire an merge to stay ahead of competition,” Said Gala. The company is actively studying potential acquisition in Germany, which is the leader in manufacturing valves and other auto components.

“ We have targeted a market share of 13 per cent to 18 per cent globally in the next five years,” said Gala. So, Gala Precision with GW’s funds is looking at setting up marketing offices in EU and the US.

Sanjay Arte, business manager for GW Caps, said Gala Precision in one of the four companies listed for investments through the institution’s India Value Fund.