M038;M to invest Rs 400 crore; targets 1.2 lakh unit capacity

Looking to strengthen its market leadership position in the farm equipment sector business

Looking to strengthen its market leadership position in the farm equipment sector business, Mahindra 038; Mahindra Ltd would invest Rs 400 crore in the next two-and-half years on capacity expansion, including a greenfield plant, and development of new products.

The company is scouting around for a suitable location for the greenfield plant for tractors which will have a starting capacity of 40,000 units a year. The company is also investing heavily in brownfield expansions at its three existing plants in Jaipur, Rudrapur and Nagpur.

8220;We have been gradually increasing our farm equipment manufacturing capacities of our different plants and in the next two to two-and-half years, we will be investing Rs 400 crore on these and new product developments,8221; Mahindra 038; Mahindra president, farm equipment sector, A Choudhari said here at the launch of its new tractor the 25 HP 8216;Shaan8217;.

Choudhari said that Mahindra 038; Mahindra is eyeing two-three locations for the plant and is in talks with the respective state governments for the same. The new plant is expected to start operations in the next 18-24 months time.

The company is hiking its production in Jaipur by 5000 units to 15,000 units while production at the Nagpur plant will go up to 50,000 units. The capacity at its Rudrapur plant will also go upto 39,000 units and Choudhari expects Mahindra 038;Mahindra to end the year with a production capacity of 1,20,000 units.

On the issue of acquisition of Tractorul in Romania, Choudhari said M038;M was still in talks with the Romanian government after the renewed offer of selling the company through viable options.

The Romanian government8217;s decision to write off 180 million euros debt of Tractorul while selling it to Mahindra 038;Mahindra was rejected by the European Union8217;s competition commission, after which a renewed offer was made, he said.

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Mahindra038;Mahindra sold 50,923 units of tractor in the first half of the fiscal, registering a growth of 29 per cent while maintaining 30 per cent share in the domestic market.