Dubai: Diversified $7 billion (Dh25.7 billion) Indian conglomerate Mahindra & Mahindra will hold a 51 per cent stake in a joint venture in Ras Al Khaimah that sells armoured vehicles to the region.
Ras Al Khaimah Transport Investments and Arabia Holdings has signed an agreement with M&M subsidiary Mahindra Overseas Investment Company Mauritius to provide armouring services to African, West Asian and Central Asian markets.
M&M, through its division Mahindra Defence Systems (MDS), has over the past six years acquired a leadership position in India in the field of vehicle armouring and brings to the joint venture its experience in the design and development of ballistic kits for vehicle protection.
The Middle East, Africa and Central Asia have witnessed a growing demand for armoured vehicles for commercial and personal use.
International brands such as Mercedes, Renault and Rolls-Royce make custom-built vehicles for security-conscious individuals in these regions, while the demand for cash delivery vans has been on the upswing since 2001.
Arabia Holdings, which will have 37 per cent of the new venture, has diverse business interests in the UAE in the transportation, logistics and real estate sectors. It is based in Ras Al Khaimah and has been exporting armoured vehicles from local markets. It brings to the venture its existing relationship with various agencies.
Ras Al Khaimah Transport Investments, with 12 per cent shareholding, has been established by the Ras Al Khaimah Transport Authority for partnering with Mahindra and Arabia Holdings in the joint venture.
The new company will cater to the "high potential markets of West and Central Asia as well as Africa", the firms said.
The venture will launch a number of Mahindra's armoured vehicles — such as the Marksman, the up-armoured Scorpio SUV, and a cash-in-transit van — which have been successful in India.
MDS has emerged as India's largest private-sector company for the supply of bullet-proof vehicles. It also provides solutions for the range of light combat and armoured vehicles and their derivatives for defence and security forces.
"At present, MDS sells 250 vehicles per year. The company's current largest market is India," chief executive Brigadier (Retd) Khutub Hai told Gulf News. These up-armoured vehicles are already in service with the Indian Army, Indian Air Force and the para-military and state police forces in India.
Ras Al Khaimah was chosen as the venture's base as it provides a low cost of manufacturing in the free zone and is geographically close to the Gulf countries, Africa and the Asian sub-continent, thus ensuring easy access to these markets, the company said.