The Hindu Business Line : M&M to set up Rs 1,000-cr greenfield facility

Plans on the anvil
Company looking at 5 States - Uttaranchal, TN, Maharashtra, AP, Karnataka for greenfield unit
To expand engine plant capacity at Igatpuri
Nashik plant capacity to be scaled up to 150,000 units

EXPANDING BASE: The Mahindra Group Chairman, Mr Keshub Mahindra, and the Maharashtra Chief Minister, Mr Vilasrao Deshmukh, in Mumbai on Wednesday at the signing of memorandum of understanding with the State Government to set up a facility in Nashik. The Group plans to set up a greenfield facility by 2009 at an investment of Rs 1,000 crore. — Paul Noronha

Mumbai , Aug. 16

Mahindra & Mahindra plans to set up a greenfield facility by 2009 at an investment of Rs 1,000 crore. The company on Wednesday also announced additional investments to the tune of Rs 800 crore for a new project as well as for expansion of an existing facility.

The greenfield facility will have an initial annual production capacity of 1,00,000 units, eventually to be scaled up to 500,000 units, Dr Pawan Goenka, President, M&M, said: "We are looking at five States - Uttaranchal, Tamil Nadu, Maharashtra, Andhra Pradesh and Karnataka; the location will be finalised soon."

Of the additional investments of Rs 800 crore, Rs 550 crore will be spent on a new project code-named `Ingenio' at the company's Nashik plant for which M&M signed a memorandum of understanding with the Maharashtra Government on Wednesday.

Ingenio is the code name for the yet-to-be-named, multi-purpose vehicle that M&M intends to manufacture by 2008.

Capacity expansion

The Nashik plant has a capacity of 80,000 units that will be scaled up to 150,000 units. It will then cater to the production capacity of three models - Scorpio, Ingenio (codename) and the Renault Logan.

According to Dr Goenka, the market response for each of the three models will dictate their production scale.

With the rise in production at the Nashik plant (150,000 units), the company will now have an overall annual production of over 3,00,000 units with capacity outputs from its Kandivali, Haridwar and Zarihabad facilities at 50,000 units each.

The company will recruit 1,400 people (1,200 workers and 200 engineers) for the new developments.

Engine plant

The company will also expand its engine plant at Igatpuri at a cost of Rs 250 crore. Its existing daily capacity of 450 engines will be increased to 800.

M&M is also experimenting with engines both for 15 per cent blended biodiesel use and 100 per cent biodiesel use. IIT Kanpur is collaborator for the biodiesel project, said Dr Goenka.

For a 15 per cent blend no major changes in engine is required, and testing on vehicles is currently being undertaken. For a 100 per cent biodiesel-friendly engine, additional R&D is being carried out. It would require a new engine to be developed but it would give long-term benefits, he said.

At the inking of the MoU, Mr Keshub Mahindra, Chairman, M&M, said that the company's commitment to Maharashtra was "more than a commitment", in fact the M&M group has allotted additional investments (Rs 1,100 crore) for special export zones (SEZs) in Thane and Pune in the State, he said. This investment will be made in a span of 3-4 years and is likely to attract investments of Rs 9,000 crore.

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