Tata Hitachi to invest Rs 200 crore in FY25, localisation remains top priority

Tata Hitachi Construction Machinery on Tuesday announced that it would invest Rs 200 crore in its two manufacturing plants to stay ahead of the curve in quality, innovation and localisation.

The company, a 40:60 joint venture between Tata and Hitachi of Japan, aims at ramping up localisation levels to 70 per cent over the next 2-3 years, its Managing Director Sandeep Singh said.

The company plans to produce 60-tonne dump trucks in India, leveraging technology from Hitachi Canada, primarily used for the mining industry, he said.

Additionally, the company intends to introduce more models in India as part of the 'Atmanirbhar' (self-reliant) policy started long back, the official said.

"We will invest a total of Rs 200 crore in our two plants in West Bengal's Kharagpur and Dharwad in Karnataka. This will help us stay at the forefront of innovation and increase self-reliance (Atamnirbharta) to 70 per cent in 2-3 years from the current 65 per cent," Singh said.

The company is celebrating its 40th anniversary of the partnership between the Tata Group and Japan-based Hitachi.

Singh emphasised that localisation is an ongoing process and crucial for cost control.

He stated that the Kharagpur plant is the largest excavator plant in southeast Asia with an investment of Rs 1,100 crore.

The total cumulative capital expenditure, including Dharwad, will be Rs 2,000 crore, the company official said.

Singh expressed optimism about the upcoming Union budget, expecting a boost to infrastructure development, which will drive demand for equipment in the second half of the year.

"We hope the budget maintains its focus on infrastructure. The growth is expected to remain flat this fiscal," Singh said.

The first half of the fiscal was down due to elections and monsoon.

The market size of excavators is approximately 1.25 lakh units, with Tata Hitachi commanding a 24 per cent share, he said.

Despite pressure from Chinese imports, the company aims at 8 per cent revenue growth.In FY'24, the company achieved a revenue of around Rs 5,000 crore, with both plants operating at 75-80 per cent capacity.