(OTTAWA) – February 13, 2012
Export Development Canada (EDC) today announced that it has provided USD 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 USD 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, who was in Mumbai, Bangalore and New Delhi in November 2011 visiting Tata and other Indian customers.
EDC’s willingness to participate in the facility is part of an ongoing engagement strategy with the Tata Group and follows the success of previous financings extended to other members of the Tata Group, including Tata Communications.
EDC and TML also worked together on a series of matchmaking sessions coinciding with the New Delhi Auto Show in January 2012. EDC identified 8 Canadian companies that are most suited to TML’s current and future procurement needs, based on direct consultation with TML, and invited them to participate in the matchmaking sessions.
“That’s the development part of EDC, where we can bring real value to Canadian companies by giving them opportunities to meet with the very senior procurement people of the foreign companies that we lend to,” added Mr. Gignac. “We know from experience that Canadian companies do very well in winning business given that chance.”
"This financing will lead directly to new business opportunities for Canadian manufacturers and increased economic prosperity in Canada," said the Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway, who met with TML while in India for a trade mission in November. "Canadian automotive manufacturers will benefit tremendously from closer ties with the growth in India's economy."
The State Bank of India is the lead bank in the facility.
The Indian auto market has grown substantially over recent years, in tandem with the explosive growth in the national economy and the middle-class demographic. In 2010 alone, the auto sector grew by 26 per cent over the previous year, with passenger vehicle sales up 30 per cent in that same period. Longer-term, the low overall ownership rate of approximately 14 vehicles per thousand people, compared to a world average of 120, which signals a very strong potential for steady growth.
Canadian companies looking to expand in India will also now benefit from the liberalization of economic policy that allows for greater foreign investment.
Two-way trade between Canadian and India reached CAD 4.2 billion in 2010, up from CAD 3.6 billion in 2006, much of which was concentrated in pulses, jewelry, textiles, pulp and paper and minerals.
EDC has permanent representations in Mumbai and New Delhi, and in 2010, more than 320 Canadian companies undertook CAD 1.75 billion in business with India that was facilitated by EDC.
EDC is Canada’s export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC’s knowledge and partnerships are used by more than 8,200 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and a recognized leader in financial reporting and economic analysis.
Export Development Canada
Chief Representative, India
Tel: +91 22 6749 4492