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Our Bureau

Chennai , Feb. 23

TVS Motor Company's board of directors today approved the company's investment in three greenfield plants, involving a total outlay of Rs 415 crore.

One is a manufacturing facility in Indonesia, with an initial capacity to produce 1.2 lakh two-wheelers a year.

The proposed investment is $50 million (Rs 225 crore). The project is to be executed by a company incorporated for that purpose in Indonesia. Initially, the company will be fully-owned by TVS Motor, but a joint venture partner coming on board at a later stage is possible.

The company expects to be able to sell 200,000 units a year from the third year — capturing 5 per cent of the market.

The second project is a greenfield unit for two-wheelers in Himachal Pradesh. The unit will be able to produce three lakh units. TVS Motor is investing Rs 90 crore in the venture.

The third is a plant for producing three lakh three-wheelers a year at Mysore. The estimated cost of the project is Rs 100 crore.

Addressing a press conference, the company's President, Mr C.P. Raman, said that all the three plants would be in production between one year and 18 months from now. He noted that the Rs 3,000-crore three-wheeler market was growing at 10 per cent a year. Initially, TVS Motor would produce petrol engine versions, but later, if the market demands, a diesel version could also come.

Answering a question, Mr Raman said that Himachal Pradesh offered attractive incentives. Under a special scheme of the Central Government for the northern hill States, units set up there would be eligible for excise and income-tax concessions.

He said that TVS Motor was in the process of finalising the location of the Indonesia plant and also the type of two-wheeler to be manufactured there.

For funding the projects, the company has organised a line of credit for $100 million (Rs 437 crore), at a rate of 95 basis points over Libor.

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