Business Daily from THE HINDU group of publications
Wednesday, Jul 19, 2006
Business Daily from THE HINDU group of publications Wednesday, Jul 19, 2006 |
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Corporate
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New Business Ashok Leyland, ANG Auto in Rs 1,800-cr tractor trailer deal Our Bureau
"ANG Auto will manufacture and supply 6,000 tractor trailer units annually to Ashok Leyland for the next five years and the order size is between Rs 1,500 crore and Rs 1,800 crore."
MEGA DEAL: Mr Vinod Dasari (left), Chief Operation Officer, Ashok Leyland, exchanging documents with Mr Premjit Singh, Managing Director, ANG Auto Ltd, after signing the agreement for marketing Leyland branded tractor trailers. — V. Sudershan
New Delhi , July 18 Commercial vehicles manufacturer Ashok Leyland on Tuesday placed a five-year order worth up to Rs 1,800 crore for tractor trailers with ANG Auto Ltd. The order would be executed by ANG subsidiary, ANG Auto Tech, which in turn will invest Rs 61 crore for setting up a 6,000 unit annual capacity for Ashok Leyland at its Sitarganj unit in Uttaranchal. The unit is expected to be operational by October. "ANG Auto will manufacture and supply 6,000 tractor trailer units annually to Ashok Leyland for the next five years and the order size is between Rs 1,500 crore and Rs 1,800 crore," said the Ashok Leyland Chief Operating Officer, Mr Vinod Dasari. He said that Ashok Leyland may look at picking up a stake in the ANG subsidiary ``at a later stage''. ANG Auto is a component manufacturing company and had revenues of Rs 57 crore last fiscal with as much as 85 per cent through overseas sales. The company will hold around 75 per cent equity in the new subsidiary and manufacture the trailers in collaboration with FUWA Engineering of China, a major manufacturer of axles. Meanwhile, bullish about growth, Ashok Leyland said that it expected sales to grow 15-20 per cent this fiscal and was ``evaluating options'' to manufacture light commercial vehicles. ``We expect sales to grow 15-20 per cent this fiscal against the around 61,500 units we sold last fiscal,'' Mr Dasari said. The company produced about 65,000 units last fiscal, which it hopes to increase to 75,000 units in 2006-07. ``We will be expanding capacity to 1,00,000 units in the next two years,'' he said, adding that the company will be spending Rs 1,000 crore this fiscal on capital expenditure, including partial funding for a new truck plant. ``The new plant will have a capacity of 40,000-50,000 units and involve an investment of Rs 500-700 crore over the next 2-3 years,'' he said.
LCV plans
Asked about the company's plans for light commercial vehicles, Mr Dasari said, ``We are evaluating options to look at whether and how to get into the business of LCVs... whether we should get into that, we are debating internally.'' Ashok Leyland, he added, was talking to three to four overseas companies to help in its foray in the LCV segment, if it decided to go ahead with the project. This could be for technology or equity, Mr Dasari said, refusing to give further details.
More Stories on : New Business | HCV/LCV/Tractors
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