Rajkot-based auto components company Amul Industries Private Limited, a part of the Amul group of companies, is planning to manufacture mini tractors in a joint venture with the Escorts Group.
Both the players have also signed a Memorandum of Understanding (MoU) and will form a new company named Adico Escorts Pvt. Ltd.
“We are going to enter in the mini tractor segment by end of this year and for that we have entered into an MoU with Escorts group. We will sign a joint venture agreement in November or December this year,” said Suresh Santoki, managing director, Amul Group of Companies. While Santoki did not divulge the details regarding equity sharing in the proposed JV, Amul Group is likely to keep majority stake.
Santoki added, “Amul will invest about Rs 20 to 30 crores in this project in the first phase. The total investment will be around Rs 100 crore in the mini tractor project.
The production of mini tractor will start in December 2011 and it will be on road by January 2012. The production unit for the same is now being set up at Rajkot. The company has not yet decided the brand name of the mini tractor. In the initial stages we will manufacture about 300 tractors per month and will be expanding capacity to 800 units by 2015,” said Suresh Santoki.
Meanwhile, the company has recently started trial-based manufacturing at its Sanand plant, which will supply parts for Tata Nano.
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The company has invested about Rs 20-25 crore in this unit. Moreover Amul is expanding its crank shafts production from 3000 units to 5000 units per months. The company has planned to invest Rs 5 crore in the expansion.
Talking about the company’s plans to go public, Santoki informed, “We are considering to go for Initial Public Offer (IPO) but the time frame is undecided as our team is still working on it.”
Amul is a leading global manufacturer of automotive components that serves almost every major vehicle manufacturer worldwide. Headquartered in Rajkot, Amul has a manufacturing units at various locations in India with workforce of 2000 plus people.
Amul has already entered the Business of 5’Cs namely Connecting rods, Crank Shafts, Cylinder Blocks, Cylinder Heads, and Cam Shafts for the Automotive & Engineering Industry. The company currently supplies parts to auto companies like Tata, Maruti, Mahindra, Ashok Layland, John Deeere among many others.