The Hindu Business Line : Kirloskar Oil Engines to set up Rs 550-cr greenfield project

Mumbai March 26 The Pune-based Kirloskar Oil Engines Ltd plans to set up an Rs 550 crore greenfield project to manufacture diesel generator sets and engines, at Kagal near Kolhapur in Maharashtra.

The company, part of the Rs 4,500-crore Kirloskar Group, on Monday signed a memorandum of understanding with the Maharashtra Government. The project, which will come up on a 200-acre land, also includes an export-oriented unit and a suppliers' park.

Mr Atul Kirloskar, Chairman and Managing Director of Kirloskar Oil, said production of generator sets would commence in the export unit by September and production of engines will start by April 2008. The export-oriented diesel generator sets would manufacture 12,000 diesel sets per annum.

The unit is expected to achieve a turnover of Rs 300 crore in the first year of operation. The project would be funded up to Rs 350 crore by debt and Rs 200 crore by internal accruals. The company is looking at Africa and West Asian markets for exports. Currently, exports account for 15 per cent of the company's total sales, he said.

Mr Kirloskar said that company has taken 58 years to achieve Rs 1,000 crore turnover but given the present boom in the business the company would be able to double its turnover in five years.

On asked about the viability of an export oriented unit away from the sea-port, Mr Kirsloskar said, "Costal unit would not necessary result into faster sea transportations. Goods will still have to wait in the queue at the port. Our inland facility has the advantage as it is located in close proximity to supplier units."

Mr Kirloskar said that engines and generator sets are also capable of running on alternative fuels such as CNG, biogas and ethanol.

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