Escorts Kubota to Invest Rs. 4,500 Crore in Setting Up Greenfield Plant

15 May, 2024

Escorts Kubota LTD, a leading farm and construction equipment manufacturer, has plans to set up new manufacturing units in India with a whopping investment of Rs. 4,500 crore over three to four years.  The company's whole-time director and CFO, Mr Bharat Madan, announced this. 

The upcoming plant of Escorts Kubota is likely to be in Rajasthan. The company is currently seeking a suitable site in Ghiloth, Rajasthan, and is continuously in touch with the local government regarding the same. 

Escort Kubota’s vision for this plant is to set up an integrated greenfield plant so that its domestic tractor production can be doubled. The current annual tractor production capacity of Escorts Kubota’s Faridabad-based manufacturing units is  1.7 lakh, which is likely to be near about 3.4 lakh units once this greenfield plant is ready. 

In addition, the company aims to design and develop innovative engines and construction equipment. 

"The greenfield plant will involve doubling tractor production capacity, setting up a new engine line and a construction equipment line in phases. Overall, the greenfield project may cost Rs 4,000 crore to Rs 4,500 crore over the next three years," said Madan. 

Going further, Madan also informed that the normal capex for FY25 is near about Rs. 300 crore and the anticipated tractor sale growth for the said period is likely to be a mid-single digit growth. The tractor demand is likely to be picked up in the second half of FY25. 

Shedding light on the company’s first-quarter performance, he said that the company isn’t expecting any significant growth in the first quarter of FY25. But, if monsoon remains good then this industry is likely to recover from September onwards. Escorts Kubota is likely to continue gaining significant market share in FY25 just like it did in FY24.