Escorts Group has drawn expansion plan for around Rs 400-Rs 460 crore over the next couple of years for increasing capacity and for joint ventures (JVs) in the tractor and construction equipment business.
The company has planned Rs 90 crore for FY19 in its JVs with Tadano and Kubota. It has already invested Rs 30 crore in Tadano JV and will pump in Rs 60 crore in Kubota JV during Q4/FY19. It may invest another Rs 60 crore in Kubota JV during FY20. These JV investments are in addition to the earlier outlay. Escorts Group is likely to spend about Rs 100 crore to increase capacity.
The company entered into a 40:60 JV with Japan’s Kubota Corporation for technology collaboration and joint manufacturing of high-end tractors. The partners are aiming at strong domestic and exports market share through the JV operations.
A new common manufacturing unit with an initial capacity of 50,000 units will be established and the tractors coming out of the unit will be sold by both players respectively through their separate channel network in the domestic market. Both companies will jointly develop new products to cater to India and overseas markets. As part of the collaboration, Kubota will export Escorts tractors through Kubota global distribution network in specific markets.
Under its 51:49 joint venture with Tadano Group, Japan-based mobile crane manufacturer, Escorts will manufacture rough terrain cranes and truck-mounted cranes. The higher capacity cranes of 20-80 tonne of JV will target applications in railways, mining, power sector and roads and bridges. The JV will also explore the export potential.