Off-highway tyres maker, Alliance Tire Group (ATG), will be investing around $160 million (Rs 840 crore) in setting up a greenfield facility in Gujarat, besides expanding its existing plant in Tamil Nadu.
According to the company’s project disclosure, ATG currently has a 48,000-tonne per annum (tpa) plant in a special economic zone (SEZ) near Tirunelveli, Tamil Nadu, which is in the process of being expanded to 61,000 tpa and another 35,000 tpa plant near Hadera, Israel.
The company is now planning to expand its Indian operations by setting up a greenfield plant at Jhagadia Kharchi Extension in Gujarat with a capacity of 50,000 tpa, a further expansion of 29,000 tpa in Tirunelveli and installing a co-generation plant in the same location. The project is expected to create 850 additional jobs directly.
To support the investment plan, the company is planning to raise money from the International Finance Corporation (IFC), which in turn said that it was planning to invest up to $65 million for its own account and will try to mobilise additional funds to part-finance the expansion.
“IFC will provide loans with the required tenor (of up to 11 years) and grace period, which otherwise are difficult to obtain in the current economic environment. IFC’s investment will help attract other potential investors, especially when the company goes public,” the corporation said.
ATG manufactures off-highway tyres that are used in agricultural, forestry, construction and earth-moving equipment. Almost 60 per cent of its sales are from the agriculture equipment sector, where increasing productivity is critical to meet the increasing food demand.
Source : Business Standard