Escorts Kubota withdraws plan to set up new unit at Ghiloth in Rajasthan

Farm equipment and construction equipment firm, Escorts Kubota Ltd on Wednesday said it has withdrawn its plan to set up a new manufacturing plant at Ghiloth in Rajasthan due to failure to meet all the key requirements for a large-scale project. The company, which has lined up an investment of up to Rs 4,500 crore over the next three to four years to set up a new manufacturing plant, said it continues to explore alternate options with other states, including Rajasthan.

Escorts Kubota had submitted an Expression of Interest (EOI) to Rajasthan State Industrial Development and Investment Corporation (RIICO) for the proposed acquisition of land in Ghiloth, Rajasthan, subject to requisite approvals and clearances, for setting up an integrated greenfield manufacturing facility, for expanding the existing capacities, the company said in a regulatory filing.

"...based on the detailed assessment of the location, the company has reached a conclusion that the location does not meet all the key requirements for a large-scale project being planned and accordingly the company has withdrawn the aforesaid EOI," it added.


One of the key factors for the company withdrawing the EOI was the state government's inability to commit to providing adequate industrial water for the project. However, Escorts Kubota in its filing said it is "committed to setting up an integrated greenfield manufacturing facility in line with its Mid Term Business Plan (MTBP) and continues to explore the alternate options with other states, including Rajasthan".

Through a new manufacturing plant, Escorts Kubota plans to double its domestic tractor production capacity to 3.4 lakh units annually, while also setting up new engine and construction equipment lines in phases.

At present, the company has a total annual tractor production capacity of 1.7 lakh units. The main plant is located at Faridabad. Its engine production capacity is 1.5 lakh units annually with Kubota engines currently being imported.