Financial Daily from THE HINDU group of publications
Tuesday, Jan 20, 2004
Financial Daily from THE HINDU group of publications Tuesday, Jan 20, 2004 |
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Corporate
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Outlook Ashok Leyland plans Rs 390-cr investment — May make a foray into China, Pakistan Our Bureau
Mr R. Seshasayee, MD, Ashok Leyland, at the wheel of a Newgen truck at the Auto Expo in New Delhi, on Monday. — Ramesh Sharma
New Delhi , Jan. 19 ASHOK Leyland Ltd plans to invest around Rs 390 crore for expansion and manufacture of new vehicles and set up joint ventures in China and Pakistan. The company Managing Director, Mr R. Seshasayee, told presspersons here on Monday during Auto Expo, 2004 that around Rs 140 crore would go towards expanding the capacity to 76,000 vehicles from 50,000 per annum. Around Rs 250 crore will be invested to manufacture cab systems and J series engines. Part of the funding could come through infusion of fresh equity. "We do not rule out equity infusion,'' he said. These investments will be spread over a period of two years. The R&D budget will be increased to two per cent of the turnover.'' The industry was riding on a huge growth giving companies such as Ashok Leyland to increase capacity and set up more ventures outside India. "Earlier the industry was spurred by positive outlook but this time it has been triggered by phase out of old vehicles,'' Mr Seshsayee said. Ashok Leyland plans to set up a manufacturing plant in Pakistan and China for producing trucks and tractors. In China, it will be a joint venture on a 50:50 basis because of the norms followed in that country for such projects. No decision has been taken for the joint venture in Pakistan. The company will despatch the first consignment of trucks to Iraq by the month-end. It had earlier received an order for exporting around 3,300 vehicles to Iraq. In 2002-03, the company exported around 3,500 vehicles. For West Asia, the company will export vehicles from India instead of setting up a plant there. "We see a lot of action in the next 12-18 months as far as international foray is concerned,'' Mr Seshsayee said. He said the company expects a 30 per cent growth in 2003-04 on a year-on-year basis. The new Newgen range of trucks and buses will be launched in the market during the next financial year. The 4026J tractor will be rolled out first followed by 3126J tipper and a modern range of buses, all of them powered by the eight-litre J series engine with an initial power offering of 260 hp.
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