The Hindu Business Line : Mahindra's next investment in TN could be in tractors

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Chennai Feb. 26 The next investment by Mahindra & Mahindra group in Tamil Nadu could well be for a tractor facility. Dr Pawan Goenka, President, Automotive Sector, M&M, told Business Line today that the group was in negotiations with the State Government for the project. Although he said the discussions were at a preliminary stage, officials from the State bureaucracy told Business Line that they were confident the investments would happen.

Vendor meet

M&M has called for a meeting of vendors in Mumbai for Wednesday. Auto component manufacturers from the Chennai region are obviously thrilled. "It is a great opportunity for South-based vendors. This is the kind of scale is what we really need," Mr L Ganesh, Vice-Chairman of, Rane group and former President of the Automotive Component Manufacturers Association (ACMA), told Business Line. While it is not clear as to what the consortium will buy locally — some clarity on this will emerge after Wednesday — components suppliers are gearing up for the new business. It is learnt that apart from Rane and TVS group, Tube Investments (which makes door frames for cars) and MRF are among those invited for the Wednesday meeting.

200-acre components park

The Tamil Nadu's Industry Secretary, Mr Shaktikanta Das, said the Government had earmarked 200-acres of land exclusively for vendors. The land, as for the main project too, has been identified and partly acquired.

Huge employment potential

The facility is expected to give jobs to 5,000 people directly, but Mr Shaktikanta Das estimates the indirect employment to be about 40,000. "As per our rough calculations," he said, "the M&M-Renault-Nissan plant will add Rs 18,000 crore to the State GDP". He said that investments by vendors would (have to) be about Rs 10,000 crore.

The Chairman of M&M, Mr Keshub Mahindra, said the consortium would set up vocational schools in the area in order to give jobs to the locals even while the project is in its gestation.

MoU bulky

The MoU signed today is a 51-page document, which, apart from project details builds scenarios and the respective roles of the partners. "The draft was ready only at 6 am this morning", said Mr Shaktikanta Das. The State Government was described by Dr Pawan Goenka as the "fourth partner" in the joint venture.

`Perfect gift' at 50

The agreement with Mahindra-Renault-Nissan was a perfect birthday gift for the Mr Shaktikanta Das. Mr Das, who greeted the Chennai journalists as he walked into the hall for the press conference, was surprised when the journalists, in turn, wished him on his birthday and remarked that it was a perfect gift for him.

Mr Das turned 50 today. Dr Pawan Goenka, who would be the Chief Executive Officer of the yet-to-be-named company, and others acknowledged more than once the efforts put in by Mr Das and his team that brought the project to Tamil Nadu.

Second time lucky

Mr Keshub Mahindra, Chairman of Mahindra & Mahindra, said the three-way alliance was a reflection of the changing world — when an international consortium was being formed to meet the challenges of a globalised world.

He recalled that his company had signed an agreement with Renault in France 50 years ago, to produce cars. Unfortunately, that did not take off because it did not get approvals. The price of the car then was to be less than Rs 7,000, he said.

More Stories on : Outlook | HCV/LCV/Tractors | Mahindra & Mahindra Ltd

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