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Mahindra & Mahindra is expected to a sign a Memorandum of Understanding with Tamil Nadu governemnt any time soon. The company will invest around Rs 2,000 crore to set up an automotive and testing facility, a senior official fo the company said.
The fate of the project, which was initiated in 2011, remained uncertain so far as the company was not allotted land for the project. The state has already lost around Rs 300 crore due to the delay.
Speaking to Business Standard on the sidelines of SAEINDIA’s SIMCOMV EC 2013 Dr Pawan Goenka, executive director and president –automotive and Farm Equipment Sectors, Mahindra & Mahindra Ltd said “we are in dialogue with the industrial department and discussion is almost completed and MoU is ready to be signed. We are waiting for the Cabinet Approval, the MoU will go the Cabinet by this month and the moment approval is done we will sign the MoU”.
The fate of the project, which was initiated in 2011, remained uncertain so far as the company was not allotted land for the project. The state has already lost around Rs 300 crore due to the delay.
Speaking to Business Standard on the sidelines of SAEINDIA’s SIMCOMV EC 2013 Dr Pawan Goenka, executive director and president –automotive and Farm Equipment Sectors, Mahindra & Mahindra Ltd said “we are in dialogue with the industrial department and discussion is almost completed and MoU is ready to be signed. We are waiting for the Cabinet Approval, the MoU will go the Cabinet by this month and the moment approval is done we will sign the MoU”.
The company is committing around Rs 2,000 crore investment to set up an automotive and testing facility, which will spread over in around 400 acres at Cheyyar, in southern Tamil Nadu. The original plan was to bring the tractor facility and testing ground, followed by an automotive plant. “Since the MoU got delayed the tractor plant we have to set up at Zaheerabad in Andhra Pradesh, the project already started the production from beginning of this
year”.
The company has invested over Rs 300 crore in the Andhra Pradesh facility, which has a production capacity of around one lakh tractors per annum and currently its running in full capacity. This investment was supposes to come to Tamil Nadu. Mahindra & Mahindra is now planning to set up a testing ground on the Phase I, which will spread over in around 200 acres of land and phase II, when the company takes up the automotive expansion across the Country, it will set up an automotive plant (for four wheeler).
To a question on what caused the delay the project in the state, whether it was due to the government side or due to the company, Goenka refused to comment.
He added, the company doesn't like to commit high investment and then reduce it, “but when we bring the full fledge automotive plant here it will go beyond the committed investment, since an automotive plant cost more than Rs 2,000 crore”, said Goenka.
“Tamil Nadu is important for the company and we want to have a plant and testing facility here. Testing facility will be fairly large and very important for us, since our R&D is here. Right now we are suffering because we don’t have testing facility in India and need to go to UK, Australia or Korea to get the testing done”, said Goenka. The automotive plant will cater to both domestic and export markets, and the location is more to do with the model, but not for domestic and export driven. As soon we get this land, the company will start the testing facility, which will allow the company to do engineering, testing and later production.
The plant will cater to both domestic and export markets, and the location is more to do with the model, but not for domestic and export driven.
When asked when the plant will be ready, he said “it all depends on the timing, if we don’t have the land, when we need it then we will do it somewhere else. We cannot wait for the land to come to us and delay our plans”.
He noted, while in Tamil Nadu since it was getting delayed the company moved tractor plant to Andhra Pradesh, “because we did not had the MoU and the land, so it depends on when the land and then we will plan and decide”. Land will be allocated by the State Government, not fully acquired as of now.
Tamil Nadu is very important state for us, we would like to do more and more in the State. The company already invested around Rs 600 crore in the Mahindra Research Valley (MRV) on the outskirts of Chennai with about 2,500 people.
