Calcutta, Feb. 10: After more than 60 years, an automobile manufacturer is setting up a factory in Bengal.
Ural, a Russian company with a presence in at least 30 countries, will build a commercial vehicle unit at Haldia at an initial cost of Rs 500 crore in partnership with a private Indian company and a government industrial promotion agency.
The factory will make 7,000 heavy commercial vehicles a year to begin with, producing six models of trucks and dumpers.
This will be the first investment in a vehicle manufacturing facility since Hindustan Motors put up its plant at Uttarpara in 1942.
To be funded with a mix of equity and debt, the project will be owned 44.5 per cent each by Ural and J.K. Saraf and Associates, which manufactures engineering products mainly for defence and railways, with the West Bengal Industrial Development Corporation likely to pick up the rest 11 per cent.
Ural India sought 500 acres of land from the government. The Haldia Development Authority has already identified about 300 acres in the port town which will be handed over to Ural India tomorrow.
Around 60 per cent of the vehicles to be manufactured at the Haldia plant will be exported and the rest cent will be sold in the domestic market.
J.K. Saraf, who is also the honorary consul of Chile in Calcutta, expected the project to lead to the setting up of at least 500 auto ancillary manufacturing units in the state.
“And once the auto ancillary units come up, other auto companies will also be interested in making investments in the state,” he said.
Saraf added that the Haldia unit would be an export hub for the Russian company with the port being used to despatch the products to markets in the Far East and Southeast Asia, besides other neighbouring countries.
The capacity will be ramped up in a phased manner through fresh investment, Saraf said.
along with its holding company RusPromAuto, Ural controls around 80 per cent of the Russian market. It has a joint venture in China, but the company wants to have another unit in the region to cater to Asian markets as it does not want to put all its eggs in one basket.
The Haldia unit will start with 30 per cent of the components made locally, with the indigenisation level progressively going up as ancillary units come up around it.
Sources at Writers’ Buildings said that with this breakthrough investment in vehicle manufacturing, Bengal will begin to market its potential for auto ancillary production as the cost of land is much cheaper than in established centres like Pune, Chennai and Gurgaon.
After the Indian market began to open up in the early nineties, almost all major international automobile manufacturers have entered India but not a single one has set up a facility in the eastern region.
It is an irony that such a large Russian investment is taking place in communist-ruled Bengal after the collapse of the Soviet Union.