Telcon to invest Rs 300 crore to double capacity

Telco Construction Equipment Co (Telcon), the joint venture between Tata Motors and Hitachi, will invest Rs 300 crore for doubling the capacity.

This capacity expansion is to meet the sourcing need of the company's Japanese partner Hitachi and the bullish domestic construction and infrastructure sector.

"Telcon will double its capacity to 9,000 equipment per year at an investment of Rs 300 crore. The company is in talks with states such as West Bengal, Jharkhand, Karnataka, Uttaranchal and Punjab for setting up new facilities for the expansion," said Rana Sinha, managing director, Telcon.

Telcon currently makes 4,500 equipment per year at its plants in Jamshedpur and Dharwad (Karnataka). The expansion is expected to be completed within a year.

"Hitachi has begun sourcing components and aggregates (of construction equipment) from Telcon. This will be for meeting its (Hitachi's) market requirement in Netherlands, Indonesia and Japan. Starting with just Rs 20 crore in the firts year, this sourcing is likely to cross Rs 100 crore in the next three years," said Sinha. These include fabricated components, machined parts and forgings.

Telcon and Hitachi will also be setting up joint product development programmes, to enable new technology from Hitachi, adapt to domestic conditions.

Telcon makes equipment such as excavators, backoloaders, wheel loaders, motor graders, and related components, used in the construction industry.

The company Is the largest player in the domestic construction equipment market, commanding a market share of 40 per cent. Its competitors include L&T-Komatsu, Catterpillar and JCB.

Companies such as Volvo, Hyundai and Daewoo has started off recently and are showing off potential. The smallest equipment manufactured by the company weighs 800 kg and the largest, 800 tonne.