Escorts Kubota to Invest ₹400 Crore in Greenfield Manufacturing Unit in Ghiloth, Rajasthan

Escorts Kubota Limited, a leading player in the tractor and engine manufacturing sector, has unveiled ambitious plans for a significant expansion of its manufacturing capabilities. The company has disclosed its intention to acquire approximately 258 acres of land in Ghiloth, Rajasthan, for the establishment of an Integrated Greenfield Manufacturing Facility, as outlined in its Mid-Term Business Plan (MTBP).

Existing Capacity and Utilization:

With a current production capacity of 1.70 lakh units for tractors and engines, encompassing the capabilities of their joint venture entity, Escorts Kubota India Private Limited, the company has revealed that in the fiscal year 2022-23, they operated at a utilization rate of 71% for their existing capacity. This utilization figure takes into account the production at their joint venture, reflecting the demand for their products.

Proposed Capacity Addition:

In a strategic move to meet growing market demands, Escorts Kubota Limited plans to augment its manufacturing capabilities by acquiring land in Ghiloth, Rajasthan. The proposed facility is expected to add to the existing tractor and engine manufacturing capacity, positioning the company for future growth. The chosen location of Ghiloth offers a strategic advantage, and the company aims to complete the proposed capacity addition by the end of the financial year 2027-28.

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Investment and Financing:

To fuel this ambitious venture, Escorts Kubota Limited plans to invest approximately ₹400 Crore in the land acquisition. The financing for this expansion will be sourced through a combination of internal accruals and proceeds from a prior preferential share issue to Kubota Corporation, Japan. This investment underscores Escorts Kubota's commitment to bolstering its manufacturing capabilities and further establishing itself as a key player in the industry.

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Looking ahead, the proposed expansion stands as more than a mere infrastructure investment; it serves as Escorts Kubota Limited's strategic positioning for the future demands of the market. By setting aside a portion of the acquired land for anticipated growth, the company showcases a proactive and forward-looking approach, aligning itself with the evolving needs of the agricultural and industrial sectors.

As Escorts Kubota embarks on this transformative journey, the initiative is anticipated not only to propel the company's growth but also to contribute significantly to the overall economic development of the region. The establishment of the Greenfield Manufacturing Facility in Ghiloth is poised to not only create employment opportunities but also to invigorate local economies, marking a pivotal moment in the company's commitment to regional and national prosperity.

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