Kobelco Construction to set up equipment machinery facility in India

Published: 05-Mar-2010

Kobelco Construction Equipment India, a subsidiary of Kobelco Group of Japan, is setting up an equipment machinery facility at the fast coming up multi-product special economic zone (SEZ) of Sri City at Tada in Andhra Pradesh, India.

The SEZ with a domestic tariff zone (DTZ) is coming up on a 6,000-acre land. Kobleco will build a manufacturing facility for excavators in the Sri City. It will come up on a 17-acre land. As per the company officials, the project will come in up two phases. The first phase would involve an investment of INR500 million ($11 million). The plant would have a capacity to produce 1,200 units a year. It is expected that the first phase would go on stream by early 2011. The second phase will involve an equal investment and see the capacity double. The second phase is expected to go on stream by 2012.

As per the company officials, the proposed plant will have local content to the extent of 70 %. The rest will be imported. It will import critical items such as engines, hydraulic pumps and the like. The company has invested INR5000 million ($109 million) into the project, with a very little debt component of around INR400 million ($9 million). Much of the funds had come via equity comprising promoter funding and private equity from investors. At least 25 top companies across the globe had already come on board to set up shops at Sri City.

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