TII to enter the South Korean market with KCAL India acquisition

In a strategic move poised to reshape the automotive HVAC segment, Tube Investments of India (TII) has signed a definitive agreement to acquire a 67 per cent equity stake in KCALtech System India (KCAL India), a subsidiary of South Korea-based KCAL Korea. This acquisition signals TII’s intent to fortify its position in the burgeoning automotive sector, with a particular focus on aluminium tubes and parts used in heating, ventilation, and air conditioning (HVAC) systems for automobiles.

The investment is set to bolster KCAL India’s expansion plans, enhancing its manufacturing capabilities to meet the rising demand for automotive HVAC components. TII’s decision to target this niche aligns with its broader strategy of diversifying into complementary business segments, aiming to capitalize on the growing automotive market in India.

As the Indian automobile industry experiences a surge, driven by factors such as rising disposable incomes, urbanisation, and supportive government policies, TII sees the aluminium tubes and parts sector as a pivotal growth avenue.

Headquartered in Chennai, KCAL India has emerged as a key player in the automotive HVAC space, supplying high-quality aluminium tubes and components. Additionally, the company trades in aluminium-forged parts, including pistons, shoes, and scrolls, further cementing its position in the automotive supply chain.

The MD of TII, Mukesh Ahuja, commented on the acquisition, “Through this acquisition and the planned expansion of KCAL India, we are entering the growing automobile HVAC ecosystem. This move will enable us to tap into the expanding market for aluminium components used in automobile HVAC systems, aligning our capabilities with the increasing demand for these solutions in India.”

With this acquisition, TII is poised to leverage KCAL India’s expertise and expand its footprint in the automotive market, reinforcing its commitment to innovation and sustainable growth in the aluminium sector.

Aluminium extrusions usage in the transportation sector is expected to grow at a CAGR of around 4.32 per cent during the next seven years due to vehicles’ light-weighting needs and growth in the market for new energy vehicles. Rising fuel prices and the path to decarbonisation have led to the need for lighter fuel-efficient vehicles and caused a shift towards alternate new energy vehicles. Many countries have set a specific target for carbon neutrality.

AL Circle’s industry-focused report, “The World Of Aluminium Extrusions - Industry Forecast to 2030”, unveiled that aluminium extrusions usage in the transportation sector is estimated at 5.77 million tonnes in 2023 and is forecast to reach 7.6 million tonnes by 2030, growing at a CAGR of 4.32 per cent.

Andrew Choi, President of KCAL Korea, commented, "Our collaboration with TII will provide new opportunities to KCAL India and foster mutual growth. KCAL India would immensely benefit from TII's industry expertise and customer relationships in the automobile segment. Together with our experience and TII's backing, we aim to capture the growing demand for indigenously made aluminium tubes."