TKM to invest Rs 15,530-mn in second plant

Bangalore: Toyota Kirloskar Motor (TKM) will invest an additional Rs 1,553 crore into its second plant which is being set up for building compact cars for the Indian market.

A statement from the carmaker said that the total investment into the second plant has now gone up to Rs 3,200 crore. “The fresh investment will be for the both general-purpose and specialized equipment necessary for manufacturing a new compact vehicle,” the statement said.

Earlier, the car maker had announced its decision to invest about Rs 1,647 crore for the buildings and basic equipment for the second plant. The second plant is scheduled to begin operations in 2010, with an initial annual production capacity of around 100,000 vehicles. It will produce passenger vehicles, including the Corolla, as well as a new compact vehicle.

“The aim is to meet the broad needs of customers in India, where motorization is expanding rapidly,” the statement said. Most of the investments will be through internal accruals. For additional funding, both the joint venture partners, Toyota Motor Corporation (TMC) and the Kirloskar Group, could pump in funds according to their equity holdings in the venture.

Sources in the company had earlier said that both the equity partners are in talks to raise additional funds. Toyota holds 89 per cent stake in the venture while the rest is with the Kirloskar Group.

Currently, TKM produces the Corolla and the IMV series Innova, with annual production in 2007 of 52,000 vehicles. Once production begins at the second plant in 2010, the two TKM plants will have a combined annual production capacity of around 160,000 vehicles.

The statement said both TKM plants will play an important role in Toyota’s sustainable plant activities, which seek to emphasise the role of nature in creating production sites that are in harmony with their natural surroundings, by pursuing the following initiatives:

a) Reducing energy consumption through the introduction of production technology with lower CO2 emissions;

b) Using renewable energy sources, such as biomass, solar and wind power;

c) Striving for a harmonious coexistence with the local community through such activities as planting trees at plants and

d) Reducing environmental impact through measures such as introducing a wastewater recycling system, using water-borne paints, and achieving zero discharge and landfill.