The Hindu Business Line : M&M to invest Rs 400 cr in tractor biz

Mahindra & Mahindra Ltd on Thursday said it would invest Rs 400 crore in its tractor business over the next two to three years to set up a new greenfield plant, expand capacity and develop new products.

"We have been gradually increasing our farm equipment manufacturing capacities at our existing plants. The capacity expansion would include setting up of a greenfield plant, for which we are in talks with two to three different States," said the Mahindra & Mahindra Ltd President Farm Equipment Sector, Mr A. Choudhari. The company expects the new plant to have a minimum annual production capacity of 40,000 tractor units, he added.

"We expect the new plant to be operational in the next 18 to 24 months," Mr Choudhari said, adding that over the next few months the production at its Jaipur facility will go up to 15,000 units from 10,000 units, while that at the Nagpur plant was being increased to 50,000 units.

The company will also be hiking the production capacity at its Rudrapur plant to 39,000 units, he added.

The company on Thursday rolled out a locally manufactured multi-utility tractor in this range, `Shaan'. The `Shaan' range is powered by a 25-HP engine and equipped with in-built trolley.

Mr Choudhari said M&M expected to end this year with a production capacity of 1,20,000 units.

In talks with Romania

Meanwhile, commenting on the company's proposed acquisition of Tractorul in Romania, Mr Choudhari said that M&M was still in talks with the Romanian Government after the latter approached the company with a renewed offer.

An earlier bid by M&M to purchase Tractorul had fallen through after the Romanian Government's decision to write off 180 million euros debt of Tractorul, while selling it to M&M, was rejected by the European Union's competition commission.

China facility

Mr Choudhari added that M&M was also testing the Indian market for suitability of tractors manufactured at its China facility. "We have brought in a small lot of tractors manufactured from our China facility, which are in the 20-25 HP range. Since the soil in China is different from that of India, we are testing it here," he said.