Farm and construction equipment manufacturer, Escorts Kubota on Wednesday said it has withdrawn its plan to set up a new manufacturing plant at Ghiloth in Rajasthan due to failure to meet all the key requirements for a “large-scale project being planned”.
The company, which has lined up an investment of up to ₹4,500 crore over the next three-four years to set up a new manufacturing plant, said it continues to explore alternate options with other States, including Rajasthan.
The company in November had intimated and on February 14, this year had submitted an expression of interest (EOI) to Rajasthan State Industrial Development and Investment Corporation (RIICO) for proposed acquisition of Land in Ghiloth, Rajasthan (subject to requisite approvals), for setting up an integrated greenfield manufacturing facility, for expanding the existing capacities.
Through a new manufacturing plant, Escorts Kubota plans to double its domestic tractor production capacity to 3.4 lakh units annually, while also setting up new engine and construction equipment lines in phases.
Currently, the company has a total annual tractor production capacity of 1.7 lakh units. The main plant is located at Faridabad (Haryana) and its engine production capacity is 1.5 lakh units annually with Kubota engines currently being imported.
“We hereby submit that, based on the detailed assessment of the location, the company has reached a conclusion that the location does not meet all the key requirements for a large scale project being planned and accordingly the company has withdrawn the aforesaid EOI,” the company said in a regulatory filing.
The company is committed to setting up an integrated greenfield manufacturing facility in line with its mid-term business plan and continues to explore the alternate options with other State(s) including Rajasthan, it added.
The company sold a total (including exports) of 8,612 units of tractors in May, which was a decline of six per cent year-on-year (YoY) as compared with 9,167 units in May 2023. Its domestic sales declined by 5.4 per cent y-o-y to 8,232 units during the month as against 8,704 units in the corresponding month last year.