Components maker GS Auto International today said it will invest Rs 30 crore to set up a new facility in Jamshedpur and diversify into passenger vehicle segment.
The new plant will be operational by the December this year, thereby doubling the company's annual capacity by 20,000 metric tonne of components.
"The new Jamshedpur plant will start commercial production in December 2010. We are investing Rs 30 crore on it and the plant will double our capacity to 20,000 metric tonne of component parts," GS Auto International Chief Financial Officer Neeraj Tuli said.
He said the new plant is part of the company's Rs 40 crore capex plan for this fiscal, under which another Rs 10 crore will be utilised for upgradation of its existing facility at Ludhiana. Tuli said the company will fund the investment through a mix of internal accrual and debt.
"The growth in the passenger vehicle segment is more than the commercial vehicle segment and we want to capitalise on it. Besides, our new plant at Jamshedpur will also make some components for the CV segment and we are setting up a high pressure moulding line there," he said.
GS Auto specialises in castings, machine components, suspension kits and heavy-duty high-speed trailer axles. The upcoming plant at Jamshedpur will mainly cater to the domestic market.
Tuli said the company is in talks with some original equipment manufacturers (OEM) for supplying passenger vehicle components.
GS Auto currently sells both to OEMs and the aftermarket. Among its major OEM clients are Mahindra & Mahindra, Ashok Leyland and Eicher Motors.
