Maruti confirms new plant in Gujarat, capacity to grow to 2 million units by 2015-16

June 2, 2012: Maruti Suzuki India Ltd (MSIL) has signed a State Support Agreement (SSA) with the government of Gujarat for purchase of land near Mehsana to set up an all-new manufacturing facility. This is in line with its expansion programme announced earlier this year. The new plant will be located around 100km from Ahmedabad and around 300km from the Mundra port, providing good logistical support to the carmaker’s export programme. As per the SSA, MSIL will set up two units in two phases in the backward taluka of Mandal-Becharaji Amadavad district. The first unit (first phase) will be near the historical town of Becharaji and the second unit (second phase) will come up at a location of around 25km from Becharaji.

The agreement was signed by Shinzo Nakanishi, MD and CEO, Maruti Suzuki, and Maheshwar Sahu, principal secretary (Industry and Mines), government of Gujarat, in the presence of Gujarat chief minister, Narendra Modi.

The expected investment in the plant is estimated to be around Rs 4,000 crore in the first phase. The facility, which will be commissioned by FY 2015-16, will have an initial annual capacity of 250,000 units. Along with Maruti’s existing plants at Gurgaon and Manesar, which have a capacity of 17.5 lakh units, the Mehsana plant will take total manufacturing capacity to 20 lakh units by 2015-16.

Maruti expects to generate direct employment for over 2,000 people at the Gujarat facility while the ancillary units in the vicinity and a supplier park will generate additional employment. The company’s component vendors and ancillary suppliers are expected to invest in Gujarat at matching levels. Meanwhile, Maruti plans to continue to increase its production at the Manesar facility where a third assembly line (Manesar C plant, 2.5 lakh units annually) is expected to go on stream by the middle of 2013-14.

Gujarat: a growing auto powerhouse

From Gujarat’s perspective, Maruti’s plan to set up a plant in Mehsana is yet another affirmation of the growing status of the state as a fast-growing automotive hub and an industrial powerhouse.

Gujarat’s profile as an automotive hub first came into focus when Tata Motors made the now-famous transition from Singur to Sanand. Ford India followed with its own plans for an integrated plant, Peugeot then announced its India plant there as a preferred location and now Maruti has announced its Mehsana gameplan.

The manufacturing and engineering sector in Gujarat contributes over 27 percent to the state’s GSDP and contributes nine percent overall to the national engineering output, According to chief minister Narendra Modi, at present there are more than 30 engineering clusters and new ones emerging at Sanand-Viramgam, Mandal-Becharaji, Halol-Savli, Anjar and Santhalpur. There is also considerable focus on manpower and skill-set development – there are 54 engineering, 106 diploma colleges with over 82,000 seats and 253 ITI institutes. The state has also initiated a model of skill formation training with industries.

MSIL shows off green thumb on World Environment Day

Maruti marked June 5 – World Environment Day – by revealing its extensive environment strategy to bring down emissions of its operations and reduce greenhouse emission of its vehicles. Shinzo Nakanishi, MD and CEO, said: “We have a well thought-out plan to minimise resource use, to become a greener company and safeguard the environment.”

The evolved eco-friendly approach includes:

Lower carbon footprint in manufacturing operations: This is possible through improved operational efficiencies and constant innovation. This approach has already delivered significant results. The power consumption per car has fallen by nearly 30 percent in Gurgaon in the past decade and in Manesar over five years. MSIL plans to improve its energy efficiency, particularly for upcoming facilities like Manesar Plant C. It is also helping vendor partners to adopt energy efficient technologies.

Identify, adopt and invest in new eco-friendly tech: Maruti has pledged to invest in new, cost-effective technologies that bring down greenhouse gas emissions at its facilities. The Manesar B plant (commissioned in September 2011) is the first car plant in India that is 100 percent LED and a lot more energy efficient than any of the other plants. For the Gurgaon unit, an energy audit team identifies equipment with high energy consumption and replaces it with more eco-friendly options.

Reduce vehicle fuel efficiency: As Maruti introduces new models, it employs next-gen engine technologies for improved fuel economy with lower emissions. Also, better aerodynamics and weight reduction techniques. Other eco-friendly measures include bringing down water consumption per car by 62 percent in the past decade. And, with the support of its vendors, the carmaker has been able to eliminate hazardous substances like mercury, lead, cadmium and hexavalent chromium from most of its models, and thus meet End of Vehicle Life norms much ahead of their introduction in India.