Maruti signs agreement with Gujarat on land

Maruti Suzuki India Limited has signed State Support Agreement (SSA) with the Government of Gujarat for purchase of land near Mehsana to set up an all-new manufacturing facility. The agreement was signed by Shinzo Nakanishi, Managing Director and CEO, Maruti Suzuki India Limited and Maheshwar Sahu, Principal Secretary (Industry and Mines), Government of Gujarat in the presence of Gujarat Chief Minister Narendra Modi. Maruti Suzuki’s new vehicle manufacturing facility will have the following highlights: Subject to Maruti Suzuki’s board approval, the initial annual capacity will be 250,000 units in a phased manner. All future capacity expansion will be based on market conditions. By 2015-16, the plant would be commissioned. An investment of Rs 4,000 crore would be made in the first phase for land and construction of the plant. The new infrastructure in Gujarat will be a complete vehicle manufacturing facility. The government of Gujarat has allocated around 700 acres land to Maruti Suzuki India Limited for this manufacturing facility. This land purchase by the company is in line with long term management view on expansion of its manufacturing facilities in India to meet future market demand. Based on the market demand the manufacturing facility near Mehsana will be added to the company’s existing manufacturing facilities at Gurgaon and Manesar in Haryana. This new facility will take Maruti Suzuki’s combined manufacturing capability to 2 million units by 2015-16. The current capacity at Gurgaon and Manesar plants including the Manesar C plant is 15.5 lakh units per annum. The company estimates to generate direct employment for over 2000 people at the Gujarat facility. In addition, the ancillary units in the vicinity and supplier park will generate additional employment opportunities.In addition to Maruti Suzuki, company’s vendors and ancillary suppliers are expected to invest in Gujarat at matching levels. Maruti Suzuki Gujarat plant will be located around 100 km from Ahmedabad. The new facility is around 300 km from Mundra port and hence would be well suited for company’s exports initiatives. The company will continue to increase its production at Manesar facility, where a third assembly line, (Manesar C plant, 2.5 lakh units annually) is expected to go on stream by mid 2013-14.