Investment designed to increase procurement from Canadian companies
OTTAWA: Canada’s export credit agency Export Development Canada (EDC) has provided US$100 million in financing to India’s Tata Motors Limited (TML) to open doors to procurement from Canadian companies within the greater TML family of companies. EDC is providing the loan as part of a larger US$500 million syndicated facility for general corporate expenditure purposes.
“This financing is really about the strong potential match between Canadian expertise in the automotive parts sector and the ever growing demand of the Indian market, and EDC and Tata Motors can be two key points of entry to that bridge, so to speak,” said Pierre Gignac, senior vice-president, insurance, EDC. The organization is participating as part of an ongoing engagement strategy with the Tata Group. EDC identified eight Canadian companies that are most suited to TML’s current and future procurement needs and invited them to participate in the matchmaking sessions.
The Indian auto market has grown over recent years, along with the growth in the national economy and the middle-class. In 2010, the auto sector grew by 26 percent over the previous year, with passenger vehicle sales up 30 percent. Longer-term, the low overall ownership rate is about 14 vehicles per thousand people, compared to a world average of 120 vehicles, which signals strong growth potential. EDC has permanent representations in Mumbai and New Delhi, and in 2010 more than 320 Canadian companies undertook CDN$1.75 billion in business with India facilitated by EDC.