TOPIC:JOINT VENTURE

WHAT IS JOINT VENTURE??

A joint venture is a business agreement in which parties

agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues,assets,etc.
The venture can be for one specific project only - when the

JV is referred to more correctly as a consortium - or a continuing business relationship. The consortium JV (also known as a cooperative agreement) is formed where one party seeks technological expertise or technical service arrangements, franchise and brand use agreements, management contracts, rental agreements, for one-time contracts. The JV is dissolved when that goal is reached.

Some major joint ventures include, SONY ERICKSSON , MAHINDRA-RENAULT and many more
A joint venture takes place when two parties come together

to take on one project. In a joint venture, both parties are equally invested in the project in terms of money, time, and effort to build on the original concept. While joint ventures are generally small projects, major corporations also use this method in order to diversify. A joint venture can ensure the success of smaller projects for those that are just starting in the business world or for established corporations. Since the cost of starting new projects is generally high, a joint venture allows both parties to share the burden of the project, as well as the resulting profits

BENEFITS OF JOINT VENTURE

Businesses of any size can use joint ventures to

strengthen long-term relationships or to collaborate on short-term projects. A joint venture can help your business grow faster, increase productivity and generate greater profits. A successful joint venture can offer: access to new markets and distribution networks increased capacity sharing of risks and costs with a partner access to greater resources, including specialized staff, technology and finance

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Joint ventures often enable growth without having to

borrow funds or look for outside investors. You may be able to use your joint venture partner's customer database to market your product, or offer your partner's services and products to your existing customers. Joint venture partners also benefit from being able to join forces in purchasing, research and development. A joint venture can also be very flexible. For example, a joint venture can have a limited life span and only cover part of what you do, thus limiting the commitment for both parties and the business' exposure. Joint ventures are especially popular with businesses in the transport and travel industries that operate in different countries.

RISKS ASSOCIATED WITH A JOINT VENTURE

Partnering with another business can be complex. It takes

time and effort to build the right relationship. Problems are likely to arise if: the objectives of the venture are not totally clear and communicated to everyone involved the partners have different objectives for the joint venture there is an imbalance in levels of expertise, investment or assets brought into the venture by the different partners different cultures and management styles result in poor integration and co-operation the partners don't provide sufficient leadership and support in the early stages

Case study:

The BMW Group is one of the most successful manufacturers of automobiles and motorcycles in the world with its BMW, MINI and Rolls-Royce brands. As a global company, the BMW Group operates 25 production and assembly facilities in 14 countries and has a global sales network in more than 140 countries.

During the financial year 2010, the BMW Group sold 1.46 million cars and more than 110,000 motorcycles worldwide. The profit before tax for 2010 was euro 4.8 billion on revenues amounting to euro 60.5 billion. At 31 December 2010, the BMW Group had a workforce of approximately 95,500 employees

SGL Group is one of the worlds leading manufacturers of carbon-based products. It has a comprehensive portfolio ranging from carbon and graphite products to carbon fibers and composites. SGL Groups core competencies are its expertise in high-temperature technology as well as its applications and engineering know-how gained over many years. SGL Groups carbon-based materials combine several unique properties such as electrical and thermal conductivity, heat and corrosion resistance as well as high mechanical strength combined with low weight. Products from SGL Group are used predominantly in the steel, aluminum, automotive, chemical and glass/ceramics industries. However, manufacturers in the semiconductor, battery, solar/wind energy, environmental protection, aerospace and defense industries as well as in the nuclear energy industry also figure among the Companys customers. With 45 production sites in Europe, North America and Asia as well as a service network covering more than 100 countries, SGL Group is a company with a global presence. In 2010, the Companys workforce of around 6,300 generated sales of 1,382 million. The Companys head office is located in Wiesbaden/Germany

.. an effort to get a leg up on the competition, BMW In

has just announced that it has paired up with SGL Group to produce carbon fiber and textile semifinished products for vehicle construction to install [carbon fiber reinforced plastic] on a large scale in a series vehicle at a competitive cost
The joint venture will be operated through two companies, one based in North America (SGL Automotive Carbon Fibers LLC), and the other in Germany (SGL Automotive Fibers GmbH & Co KG). The BMW Group holds 49% of the shares, and the SGL Group 51%. The two groups will be equally represented in the management of the two companies; major corporate decisions must be made unanimously by both partners. The joint venture will initially create around 180 new jobs in North America and Germany.

Two plants are currently under construction; one is located in Moses Lake and one in Wackersdorf. They will start supplying products for volume manufacture in 2013, with an initial capacity of 3,000 t.

Planned factory in mosses lake,USA

Factory in Wackersdorf,Germany

The first series vehicles with a significant amount of carbon fiberreinforced plastics launched under the new sub-brand BMW i will be the so-called Megacity Vehicle or BMW i3, which is a batterypowered vehicle, and shortly afterwards the BMW i8, a sports car with plug-in hybrid drive.

Currently a state-of-the-art carbon fiber production plant is being built in Moses Lake on 60 acres of land. During the initial phase, US$ 100 million will be invested and 80 local jobs will be created. It will be the world's most cost efficient carbon fiber plant using the latest technologies. Similarly to the BMW Group and the SGL Group sustainability also has a substantial importance for the joint venture SGL ACF

In the first expansion stage at the Bavarian Wackersdorf Innovation Park, the joint venture SGL ACF is investing around 20 million and creates around 100 new jobs by 2013. On the existing area of around 10,000 m the production line for several thousand tons of carbon-fiber fabrics per year is being established. This is the basic material for manufacturing CFRP parts and components at the BMW Group plant in Landshut, Bavaria.

BMW I3 FIRST CAR TO HAVE A CARBON FIBRE PASSENGER CELL

The first vehicle to use the carbon fibers manufactured in Moses Lake will be the BMW i3, an all-electric car designed to meet the mobility needs of drivers in highly populated urban areas throughout the world. Driven purely by electric power to meet the demands of sustainable and emission-free mobility, the BMW i3 embodies an intelligent form of urban transportation and commuting.

Previously known as the Megacity Vehicle, the BMW i3 will be the first BMW with the innovative LifeDrive architecture. The Life module part of the design is the passenger compartment made from high-strength, extremely lightweight carbon fiber-reinforced plastic (CFRP). The use of this high-tech material across large sections of the car ensures the Life module is remarkably light helping to improve the BMW i3s range and performance.

The Moses Lake plant covers 60 acres of land with the option to purchase additional land for future growth. The plant will initially run two carbon fiber lines, each with an annual capacity of 1,500 metric tons. After a year of design work with ground-breaking in July 2010, SGL Automotive Carbon Fibers completed the new Moses Lake Facility in April 2011 after only ten months of construction.

The Moses Lake carbon fibers will be processed into lightweight carbon fiber fabrics at the second joint venture site in Wackersdorf, Germany. The carbon fiber reinforced plastic parts and components will be produced from these fabrics at the BMW plant in Landshut, Germany. The new BMW i3 will be manufactured from these parts at the BMW Group plant in Leipzig, Germany.

Success rate of this joint venture

It is said that the carbon age has begun with this joint

venture between SGL and BMW . Their megacity car called I3 is already raging the roads of highly dense cities of Europe. Not only this car uses highly prominenent carbon fiber but also electricity for the power Noting this success of these two companies we become somewhat sure that joint ventures are good for developing new and original projects