M&M to set up nation's first auto shredding unit in Western India

Company silent on quantum of investment; will enter 50:50 JV with MSTC, a govt-owned firm

M&M, the country's leading auto maker will set up the nation's first auto shredding facility in Gujarat or Maharashtra along with MSTC, a government owned company. A new company with be set up by Mahindra Intertrade and MSTC through a 50:50 joint venture.

Without disclosing the investment, Sumit Issar, managing director at Mahindra Intertrade said a 'sizeable amount' will be needed to set up several shredding facilities in the country along with collection centres.

The raw material for these facilities will come from old vehicles and consumer durables. The finished product, steel scrap, will be sold in the open market. The steel processing units of Mahindra could also be buyers of this scrap. India imports about 5 million tonnes of steel scrap that feeds into secondary steel making units as raw material. The first such facility is expected to be operational by March 2018.

The company said that an estimates 55 million 15 year old vehicles are present in the country. This could be a potential raw material source for the shredding units. India does not have a policy for vehicle scrapping but the government is actively considering a mechanism to encourage scrapping of old vehicles to de-congest roads and reduce pollution.