Ashok Leyland, the Hinduja Group flagship in India, today signed an MoU with the Ras Al Khaimah Investment Authority (RAKIA) for setting up a bus assembly unit in the first phase that will be eventually upgraded to a vehicle assembly plant (for trucks and buses) in the second phase.
The agreement was signed today by Mr. R Seshasayee, Managing Director, Ashok Leyland, and Dr. Khater Massaad, Advisor to the RAK Crown Prince and CEO of RAKIA, in the presence of H.H. Sheikh Saud bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of Ras Al Khaimah, at the Al Dhait Palace here. The new venture would see an investment of USD 50 million in a phased manner.
Speaking on the occasion, Sheikh Saud said that he was pleased that industry leaders like Ashok Leyland have chosen RAK to set up their manufacturing base.
'The new venture highlights the fact that RAK is being increasingly recognized globally as a location of choice for industrial and other investments', Sheikh Saud said. He added that RAK Government was making serious efforts to improve the infrastructural facilities of the Emirate.
The unit, with an initial annual capacity for 1,000 buses of international styling, manufacture and quality, will start operations as a bus body assembly using Ashok Leyland chassis and bus body CKD kits sent from India (including Irizar TVS). The facility shall include a state-of-the-art paint plant for bus bodies. The unit will be managed and operated by Ashok Leyland. To start with, it will have a 450-strong workforce and will commence operation in an year's time from now.
'As a strategic window to Gulf Cooperation Council (GCC) and neighboring countries, we plan to scale up operations of the unit in phases and envisage its development into a full-fledged assembly unit for complete trucks and buses', said R. Seshasayee.
'The proposed unit will allow local value addition, close to a growing market for Ashok Leyland. Customers stand to benefit through better finish and timely delivery as we can avoid shipping of finished products. The vehicle assembly facility in UAE is in line with our practice of favoring local value addition in our major export markets', added Seshasayee.
Dr. Khater Massaad, CEO of RAKIA, said that Ashok Leyland stands to gain immensely on account of the excellent infrastructure facilities, better logistics, and lower operating costs that Ras Al Khaimah has to offer. RAKIA has allotted land for the manufacturing plant at the Al Ghayl industrial Park, which is a 28 sq. km industrial park in RAK, strategically located close to the major ports of UAE.
He noted that Ashok Leyland was the latest in the series of global industry leaders who have made RAK their regional manufacturing base, like Guardian Industries, Arc International, among others.
The RAKIA has been able to attract more than AED 3 billion in industrial investments alone to RAK in the last one year.
The unit will be provided an Industrial License that will enable duty free import of vehicle kits and duty free export of finished vehicles to GCC and the Middle East.
Ashok Leyland enjoys a market share in excess of 60% in Dubai's standard bus market, with exports to the region set to cross 1,500 vehicles per annum.
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© Press Release 2006
