Schneider Toshiba Inverter, the French-Japanese drives joint venture, has itself formed a JV with the Austrian company, VA Tech Elin EBG Electkronik, to develop and manufacture high-power, general-purpose variable speed drives, with ratings above 90kW. The products will be marketed separately by Schneider and Elin.

The new venture, STI Elin Inverter GmbH, in which Schneider Toshiba Inverter (STI) will have a majority 60% stake, is expected to generate annual sales worth around €20-30m. The new business, which will be based in Vienna, builds on a long-standing co-operation between the partners.

STI says that the new venture will strengthen its world leadership in the general-purpose VSD market. It "represents a new stage in Schneider Toshiba Inverter`s growth," says chief executive, Elie Belbel.

For VA Tech Elin, the deal will broaden its product range and allow it to address new customers. "This step enables us to provide our customers with a wider, integrated portfolio of products," explains general manager, Gerhard Geiger.

STI, in which Schneider Electric has a 60% stake, controls five subsidiaries in France, Japan, the US, New Zealand and China. It has 800 employees worldwide and, with sales of €400m in 2003, claims to be the world leader in the general-purpose drives market.

VA Tech Elin EBG Elecktronik produces VSDs under the pDrive brand name. It has 150 employees and generated sales worth €45m last year.

• Siemens recently tried to buy Elin`s parent company, VA Tech, but the Austrian government stepped in to prevent the takeover by buying sufficient shares in VA Tech to block the deal. The government was worried that the overlaps between the two companies` businesses would have led to large job losses.