New Holland To Invest $55m In Local Arm
New Holland Tractors (India) Pvt Ltd will bring in $55 million as fresh equity to fund its operations. New Holland India is a 100 per cent subsidiary of UK-based New Holland NV, the owners of the Ford brand of tractors.
The Foreign Investment Promotion Board (FIPB) had approved New Hollands proposal to expand its equity base from $15 million to $70 million in its last meeting on Saturday.
However, the FIPB is not meeting today since a number of key officials from various ministries have proceeded on election-related duties.
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According to government sources, New Holland has said that after a review of its Indian project the need for additional funds were felt and hence it sought permission for equity expansion. The first batch of 70 HP tractors are slated to roll out of the factory in April for sale in North Indian and Maharashtra markets.
New Holland NV had got approval to set up a 100 per cent wholly owned subsidiary in early 1996. Earlier, it had a jv with Escorts in which the UK company held 40 per cent equity through its Mauritius-registered arm.
New Holland India is investing about Rs 175 crore in its 68-acre factory located in Greater Noida, Uttar Pradesh during the first phase. The company is looking at manufacturing about 500 tractors a year.
The figure may go up later when they introduce their 50 HP tractors.
New Holland, at the time of seeking permission for its 100 per cent subsidiary, had said it would manufacture tractors, combine harvesters, forage harvesters, mowers, balers, loader backhoes, skid steer loaders and earthmoving machinery in India to exploit the predominantly agriculture-based economy of India.
New Holland proposes to introduce farm equipment in the Indian market through supply of know-how to small-scale industries (SSIs). The company has already tied up with several SSIs.
One of the reasons cited by New Holland for setting up a wholly-owned subsidiary was that its Indian partners had expressed their inability to provide the additional funds necessary for implementation of the UK companys revised business plans.