Japan’s Kaiho to set up vehicle recycling unit with India’s Abhishek

19, Feb. 2019

TOKYO, NNA – Japanese automobile recycling firm Kaiho Industry Co. is setting up an Indian joint venture with Abhishek Business Consolidation Pvt. Ltd., seeking a business opportunity in a barely developed market.

The local unit, Abhishek K Kaiho Pvt. Ltd, will build a recycling plant in Delhi or Haryana and plans to begin operations later this year, Kaiho said Friday. Kaiho will hold a 40 percent stake in the joint venture and its Indian partner will own 60 percent.

Rapid population and economic growth has led to an increase in the number of registered vehicles in India to around 41.8 million, the third largest in Asia after China and Japan, Kaiho said in a statement.

The Indian government estimates the number of junked vehicles, excluding two and three wheelers, will top four million units in 2025.

The amount of investment has yet to be decided, Taishi Suzuki, manager of the business development department at Kaiho, told NNA Monday.

The new firm plants to recycle 2,000 vehicles in its first year and 7,000 units annually in three years, he said.

Kaiho recycles about 12,000 to 13,000 vehicles annually in Japan, according to Suzuki.

Kaiho established a wholly owned Singapore subsidiary capitalized at 100,000 Singapore dollars ($74,000) in January to invest in the Indian venture. It plans to use the Singapore unit to develop other markets.

Kaiho has local units for auto parts sales in the United Arab Emirates and Thailand among other countries.

The Japanese company has been working with India’s Ministry of Road Transport and Highways since 2017 to compile the country’s vehicle recycling guidelines aimed at coping with environmental pollution from abandoned vehicle components including plastics, glass and rubber.

Many unauthorized firms are engaged in vehicle recycling in India without appropriate processing facilities and technical expertise. Only one company had a recycling license in the greater capital region as of last November, Kaiho said.

Abhishek group produces seat belts and air bags for automobiles with Chinese-owned Joyson Safety Systems Inc. of the United States, Suzuki said.

Joyson was formerly known as Key Safety Systems, which bought bankrupt Japanese air-bag maker Takata Corp.