Escorts Kubota is moving forward with its plans to develop a new Greenfield manufacturing facility to expand its production capacities and support its anticipated future growth, the company announced on Friday. The farm equipment manufacturer has formally submitted an Investment Intent to the Government of Uttar Pradesh (GUP), requesting approval for the acquisition of land needed for this significant project.
This recent development comes in the wake of Escorts Kubota’s decision to withdraw its earlier proposal to establish a new manufacturing plant in Ghiloth, Rajasthan. The withdrawal was attributed to the company’s inability to fulfill all the necessary criteria for executing a large-scale project. The company has reaffirmed its commitment to a substantial phased investment estimated at Rs 4,500 crore or more.
The proposed expansion involves acquiring approximately 250-300 acres of land, which will enhance its capabilities for manufacturing tractors and engines. Once fully operational, the new facility is expected to generate annual production revenues surpassing Rs 10,000 crore. Additionally, it is anticipated to create direct and indirect employment opportunities for over 14,000 individuals.
The expansion project will be implemented in stages starting from 2028. Funding for this venture will be sourced from the proceeds of a previous preferential share issue to Kubota Corporation, Japan, as well as the company’s internal accruals, as stated by Escorts Kubota. The investment intent is contingent upon obtaining the necessary approvals and clearances.
Currently, Escorts Kubota has an existing production capacity of 1.70 lakh units for tractors and engines, including 50,000 units from its joint venture with Escorts Kubota India Private Limited. For the fiscal year 2024, the company reported a capacity utilization rate of 66 percent. Following this announcement, the company’s shares closed with a gain of 2.13 percent at Rs 3,737.60 each on the BSE Sensex.
Escorts Kubota is a leading farm equipment manufacturer, renowned for its advanced tractors and engines. With a production capacity of 1.70 lakh units annually and a joint venture with Escorts Kubota India Private Limited, the company is expanding its operations with a new Greenfield facility. It focuses on innovation and growth to meet future demands in agriculture.
