Tata Motors-Hitachi JV to set up new plant at Kharagpur

MUMBAI, July 27, 2006: Telco Construction Equipment Company Limited (Telcon) today announced that it is setting up a new manufacturing plant. Telcon, the largest manufacturer of construction equipment in India, is a 60:40 joint venture of Tata Motors and Japan's Hitachi Construction Machinery Co. Ltd. (HCMC).

The plant will be located in Eastern India at Kharagpur, 125 km from Kolkata, in the State of West Bengal. It will be spread over an area of 60 hectares, with additional facilities for a vendor park. The investment is likely to be Rs 250 crores (US$ 54 million). Telcon presently has two manufacturing plants in India located at Jamshedpur in Jharkhand and at Dharwad in Karnataka.

The new plant will generate employment for about 500 people, including both direct and indirect jobs. The construction work for the new plant will start by December, 2006 and the operations will commence by March, 2008.

Telcon, which has been registering strong growth, needs to create new capacity to meet growing demand from India's infrastructure sector. Simultaneously, Telcon has been selected as a source by HCMC for select equipment for international markets. The new plant, along with the two existing facilities, will help meet both domestic and international needs.

The Kharagpur plant will manufacture backhoe loaders, midi excavators, off-highway dump trucks, wheel loaders and large mining shovels. This will take Telcon towards being a full liner in the construction equipment business. It will also house a full-fledged R&D Centre, the first of its kind to enable Telcon to develop products for both domestic and international markets. HCMC, while actively participating in creating the R&D facilities, will aim at making the new Centre a Global R&D Hub

About Telcon: Telcon, the largest manufacturer of construction equipment in India, posted a turnover of Rs.1305 crores (US$ 290 Million) in 2005-06, a growth of over 40% over 2004-05, and a PAT of Rs.89 crores (US$ 20 Million), a growth of over 113%. In the quarter ended June 30, 2006, it posted a turnover of Rs.370 crores (US$ 82 Million), a growth of over 43% over the corresponding period of the previous year, and a PAT of Rs.31 crores (US$ 6.9 Million), a growth of over 219%.

Telcon was set up in 1999 as a wholly-owned subsidiary of Tata Motors by the spin-off of the Construction Equipment Business Unit of Tata Motors. Subsequently, in 2000, Tata Motors inducted HCM into Telcon by divesting 20% of its shareholding; in 2005, HCM increased its shareholding to 40%. Telcon is in the business of designing, manufacturing, assembling, selling, distributing and dealing in all services related to earth moving machinery and construction equipment with manufacturing facilities at Jamshedpur and Dharwad and a marketing and service network across India.

Its product range presently includes hydraulic excavators, crawler cranes, wheel loaders, backhoe loaders, dumpers and motor graders. The company is also a pioneer in adopting environment friendly road resurfacing technology. It has formed a joint venture, Telcon Ecoroad Resurfaces Pvt. Ltd. (TERPL), with HCM, GreenArm Japan, and IVRCL India to promote environment-friendly road resurfacing technology in India.