Indian automotive company Mahindra to open vehicle assembly plant in Sri Lanka
Indian automotive giant Mahindra and Mahindra Limited is to reportedly open a vehicle assembly plant in Sri Lanka with an investment of US$ 50 million by August this year with an eye on the export market.
According to reports, the plant, currently under construction in Welipanna in the Kalutara District, will be a joint venture between Sri Lanka’s Ideal Motors Limited, which will hold a 65% stake and Mahindra, Mahindra while Mahindra will hold a 35% stake.
Speaking to The Sunday Morning Business, Ideal Group Deputy Chairman Aravinda De Silva has stated that upon the completion of the plants, 100 units would be assembled per month while it would be expanded to 1,000 units per month later.
During a recent event Sri Lanka’s Development Strategies and International Trade Minister Malik Samarawickrama has said that this investment would create ‘green collar jobs’.
“Mahindra and Mahindra group with Ideal motors are setting up a plant in Welipanna to assemble vehicles with an investment of over US$ 50 million. What will make this venture important is that it would create what are called ‘green collar jobs’ which are jobs in sectors that are green, clean and sustainable. These are the jobs of the future,” he has said.
The plant has been developed within one year under the expertise of the Mahindra team and will incorporate global technologies.
Meanwhile, Mahindra Automobiles Chief of International Operations Arvind Mathew has said that this would be the first Mahindra assembly plant built outside India.
Ideal Group Founder and Executive Chairman, Nalin Welgama has noted that Ideal would consider exporting assembled vehicles but that it was premature to elaborate on the export plans.
“The assembly project is going to be Sri Lanka’s first proper assembly plant together with an internationally renowned auto major such as Mahindra. Some of the seating of cars will be completed here in Sri Lanka. These will be 1,200cc cars. Thereafter we can think of exporting it to other countries,” he has said.
The joint venture to set up this plant was entered into in April 2018.
OSL take:
The opening of a vehicle assembly plant in Sri Lanka by India’s Mahindra is indicative of the growing business ties between Sri Lankan and Indian businesses as well as the growing confidence levels on the strength and growth potential of Sri Lankan businesses. Other foreign automobile companies could follow India’s Mahindra and set up joint ventures with local companies to expand their businesses in the South Asian region. Also, foreign businesses/investors could further study Sri Lanka’s economy and explore business/investment opportunities covering key economic sectors.
| Article Code : | VBS/AT/04042019/Z_2 |