ERJ staff report (DS)
Mumbai, India - Alliance Tire Group is planning to build a new green-field tyre factory in India, as well as an expansion at an existing plant, representing and investment of around $160 million.
In a document on the website of the International Finance Corp. (part of the World Bank), Alliance says it plans to expand its Indian operations via: (i) the construction of a greenfield plant with a capacity of 50,000 tpa in Jhagadia Kharchi Extension in Gujarat; (ii) a further expansion of 29,000 tpa in Tirunelveli; and (iii) the installation of a cogeneration plant at Tirunelveli (the Project).
The Project cost is estimated at US$160 million. IFC proposes a financial investment of up to US$65 million for its own account and will try to mobilize additional funds to finance a part of the expansion. The greenfield facility will be located near Jhagadia in Gujarat, India, in close proximity to the port of Hazira. The Project also involves the brownfield expansion of the Company's facility in Tirunelveli, Tamil Nadu. The Project will create direct employment for about 850 people.
Alliance Tire Group (ATG) manufactures off-highway tyres that are used in agricultural, forestry, construction and earth-moving equipment. The IFC documents say ATG has a 48,000 tonnes per annum (tpa) plant in India in a Special Economic Zone (SEZ) near Tirunelveli, India that is in the process of being expanded to 61,000 tpa and 35,000 tpa plant near Hadera, Israel.
ATG is promoted by private equity firm Warburg Pincus, which has a majority stake in the Company and Mr. Ashok Mahansaria and his son, Mr. Yogesh Mahansaria.
IFC said the loan proposal will go to its board on 28 May, 2012.
Zubin Dubash ATG's Group Executive President & Director confirmed the details on the IFC website, but did not add any further detail about the products to be made at the new factory, or where they would be sold and used.
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Project summary from IFC website