Suzuki starts work on new Rs 8,000cr plant in Gujarat

HANSALPUR, Ahmedabad: Japan’s Suzuki Motor Corp kicked off work on a new Rs 8,000 crore car manufacturing plant, which is expected to churn out 2.5 lakh units annually. The foundation stone for the new 640-acre factory was laid by Gujarat chief minister Anandiben Patel in the presence of Suzuki chairman Osamu Suzuki.
Suzuki said the company intends to set up three new plants in the area, each having an annual capacity for manufacturing 2.5 lakh units.The company’s current factories in Haryana have a combined capacity of 15 lakh units annually. “The first plant in Gujarat will start production in May 2017,” Suzuki said.
The work on the plant started even as uncertainty looms over the proposed transfer of the factory premises from its Indian subsidiary Maruti Suzuki. The decision of Suzuki to take control of the plant had run into trouble last year after a section of Maruti’s investors, led by mutual funds, opposed the transfer.
Suzuki, which sweetened the deal in favour of Maruti Suzuki, has, however, still not given up on its plans. The company needs a nod from the minority shareholders for the transfer to go through, but has delayed the process as it awaits relaxed norms in the Companies Act where an amendment is pending in Parliament.
R C Bhargava, chairman of Maruti Suzuki, said the company is hopeful of getting a nod from Maruti’s shareholders to the ownership transfer plan. “We are waiting for the amendments to the Companies Act, following which we will speak to the shareholders.”
The amendments, cleared by Lok Sabha, but pending before Rajya Sabha, will lower the threshold required for the proposal to go through from 75% votes to over 50%.