Escorts Kubota to Invest Rs 4,500 Crore for New Plant Expansion Over Next 3-4 Years

Published - 13 May 2024 by Tractor Junction

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According to its full-time director and CFO Bharat Madan, farm and construction equipment manufacturer Escorts Kubota Ltd intends to invest up to INR 4,500 crore over the next three to four years to set up a manufacturing plant.

The company is currently in negotiations with the Rajasthan government regarding the Ghiloth site, where it plans to establish a greenfield plant to double the number of domestic tractors produced annually to 3.4 lakh units, as well as phased production of new engines and components. will additionally install equipment lines.

"The greenfield plant will include doubling the tractor production capacity, setting up a new engine line and a construction equipment line in phases. Overall, the greenfield project will cost Rs 4,000 crore to Rs 4,500 crore over the next three-four years," Madan said. It could be Rs."

He further said, 'This year we hope to buy land, which could cost Rs 40 crore to Rs 450 crore and then construction will start by the end of this financial year. At present the total annual tractor production capacity of the company is 1. lakh units. The main plant is located in Faridabad. Its engine production capacity is 1.5 lakh units annually and currently Kubota engines are imported.

Madan said general capital expenditure for FY25 would be around Rs 300 crore.

On tractor sales outlook for FY2025, he said the industry is expecting "mid-single digit growth" and demand growth is likely to pick up only in the second half of the fiscal."The first quarter is clearly soft. We don't expect any growth in the first quarter. April has been more or less flat and in May we have seen some decline, so overall the first quarter will still be a downtrend," he said.

According to him, the industry might start to improve in September, depending on how the monsoon distributes.

Speaking about Escorts Kubota, he stated that the company aims to outperform the sector and keep gaining market share, just as it did in FY24.

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