The Hindu Business Line : Ashok Leyland mulls plant in North India

ASHOK Leyland is considering setting up a unit in either Uttaranchal or Himachal Pradesh, in view of the incentives given to units set up in the two States.

Manufacturing units set up in the two States (and in J&K too) are exempted from excise duty for 10 years from the date of commencement of commercial production. They also enjoy 100 per cent income-tax deduction for a period of five years and 30 per cent exemption for the next five years. In addition, the States from their side offer sales tax deferral benefits.

"The incentives are very inviting. We are looking at the possibility," Mr R. Seshasayee, Managing Director, Ashok Leyland, has told Business Line.

But Ashok Leyland's problem is it already has a production unit in North India — at Alwar, Rajasthan. Otherwise, the decision to pitch tent in Uttaranchal or Himachal Pradesh would have been a one-way bet. "How many plants can we have in North India," Mr Seshasayee observed, but said that Ashok Leyland was still not ruling out the possibility of going to one of the two States.

Sources in Ashok Leyland said that putting up a plant in one of the two States was more a vision at present, and that the company had not taken any concrete steps in that direction.

Meanwhile, Ashok Leyland has had a few rounds of discussions with Thai Summit of Thailand for business relationship, which may lead on to a joint venture. Thai Summit is a good source of auto components, especially in sheet metal parts.

Sources in Ashok Leyland said that the company could take advantage of the Free Trade Agreement with Thailand for buying components.

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