Kirloskar signs MoU to set up unit at Kagal

Maharashtra has bagged yet another mega investment commitment. Kirloskar Oil Engines (KOEL) on Monday signed an MoU with the state government for setting up a facility to manufacture oil engines and diesel-based generator sets (DG sets) at Kagal five-star industrial estate of MIDC in Kolhapur district. The facility would be spread over 160 to 200 acres of land of which 150 acres has already been handed over to the company by MIDC.

KOEL will invest Rs 550 crore into the plant. The Kirloskar Group already has one manufacturing facility at Pune. The Kagal facility will be 100% export-oriented and is expected to double the company’s exports within five years. The MoU was signed by Maharashtra industry secretary VK Jairath and KOEL CMD Atul Kirloskar in the presence of industry minister Ashok Chavan.

Mr Kirloskar said the Kagal facility would see the biggest ever investment by the company in a single facility. KOEL would raise Rs 350 crore through debt, while the rest would be raised through internal accrual, Mr Kirloskar told media persons. The facility is being set up in Kolhapur district since the company had a sizeable number of suppliers in the district.

Manufacturing of DG sets would start from September this year and oil engines from April 2008. The facility will have a capacity to manufacture one lakh engines per annum which would be scaled up gradually. KOEL’s Pune facility has the capacity to produce 80,000 engines.

The plant will provide direct employment to around 750 to 1,000 persons and generate indirect employment opportunities for around 2,500. To supplement the new manufacturing facility, KOEL would also set up a supplier park on the same campus. With KOEL pledging Rs 550 crore, the state’s overall investment in the current year would cross Rs 43,000 crore.

This year global biggies such as General Motors, Boeing, Fiat-Tata, Renault etc have set up their shops in Mahashtra helping it revive its sagging image.