Dubai: India’s Ashok Leyland is investing Dh90 million plus on adding new capacities at its bus and truck assembly plant in Ras Al Khaimah, which became operational in 2010. The new capacities will mean the raising of annual production to 12,400 units from the current 8,500 plus. The new capacity will be used to meet the growing export orders coming through, especially from Africa.
The Ras Al Khaimah plant — which entailed a launch investment of Dh360 million plus — represented the first major attempt by a global manufacturer to have some form of vehicle production in the Gulf. Excluding the engine and a couple of other components, Ashok Leyland — which had revenues of $2.2 billion (Dh8.07 billion) in the last financial year — has managed to attain a more than 70 per cent local sourcing and production at this plant. It meant that the manufacturer was also successful in getting key suppliers to set up shop in the emirate as well. (The company is the fourth largest maker of buses in the world. The Ras Al Khaimah project is a joint venture between Rakia (the emirate’s investment authority) and Ashok Leyland.))
“This represents a continuation of efforts to have the Ras Al Khaimah facility as the hub for our international operations,” said Vinod Dasari, Managing Director. “For the first time, we will start production of mid-sized trucks (of 8-15 tonnes) next month. Daily production will be 10 trucks a day and add to the 24 buses that we already have with the buses.
“We are moving gradually with adding newer models that can be built here. At some point in the next year so, we could be talking about 80-10 makes as opposed to the two now. That would mean making higher end products as well.” (Of the current production of buses, two-thirds are for customers in the UAE and other Gulf markets. These are used as school and staff transport as well as in the construction sector.)
Ashok Leyland, part of the highly diversified Hinduja Group, operates its flagship production facility in the southern Indian city of Chennai. The annual production there is 150,000 units a year.
“Future increases in production will be targeted more at international locations than in India,” said Dasari. “We have two smaller assembling facilities coming up in Kenya and Ivory Coast; the opening of Iran will also create opportunities that can be leveraged through the Ras Al Khaimah plant output.
“It’s too early to say whether we will commit to production in Iran itself — that will have to wait until we see how future absorption will be. But the Hinduja Group has a very old history of association with Iran.” (The company also has a specialised unit based in the UK under the Optare brand.)