M&M to set up tractor manufacturing unit in Telangana

Giving a major fillip to industrialisation in the backward Telangana region, Mahindra and Mahindra will soon set up a tractor manufacturing unit at its Zaheerabad facility in Medak district of Andhra Pradesh.

M&M has proposed to invest Rs 300 crore on the tractor manufacturing facility over the next three years that will provide direct employment to about 2,000 people and indirect employment to another 5,000 persons, company's Vice-President (Operations) V S Venkatraman said.

The proposed unit would manufacture 90,000 tractors per year and also 3 and 4-wheeler commercial vehicles, Venkatraman said.

M&M, the world's largest manufacturer of tractors, will soon sign a Memorandum of Understanding with Andhra Pradesh government to set up the new unit and commence the project work in the first week of November, government sources said.

The company currently has its automobile plant spread over 343 acres of land at Zaheerabad, 136-km from Hyderabad, where its products like UV (Maxx), 3-wheelers (Champion Alfa), Light Commercial Vehicles and buses are manufactured. It has employee strength of 641 and a vehicle assembly capacity of 218 vehicles per day.

M&M has not sought more land for the new unit saying it would be built on the vacant land at the existing unit.

Submitting M&M’s latest proposal for setting up the tractor manufacturing unit, Venkatraman, however, wanted the state government to extend a 'special package of incentives' in view of the large employment-generation potential in the backward Telangana region, official sources said.

At a recent meeting chaired by Major Industries Minister Kanna Lakshminarayana, the state government agreed in principle to consider 100 per cent reimbursement of Value-Added Tax for 10 years from the date of commencement of production by the company.

"As per initial projections, the financial implication of VAT for the project will be Rs 120 crore in the first five years in a phased manner," a top official of the Industries Department told PTI.

The state government would also recommend, to the Union government, allocation of natural gas for the Mahindra project on a priority basis.

"All other regular incentives listed in the AP Industrial Policy 2010-15 will also be extended to M&M for the new project. Similar incentives will also be provided to the ancillary units that will come up at the Vendor Park close-by," the official said.

About 250 acres of land currently available with the AP Industrial Infrastructure Corporation at the Industrial Park near Zaheerabad would be reserved for ancillary units\vendors for creation of a manufacturing cluster in collaboration with M&M, the official added.