Maruti Suzuki India Ltd (MSIL) has signed a State Support Agreement (SSA) with the government of Gujarat for purchase of land near Mehsana to set up an all-new manufacturing facility. This is in line with its expansion programme announced earlier this year. The new plant will be located around 100km from Ahmedabad and around 300km from the Mundra port, providing good logistical support to the carmaker’s export programme. As per the SSA, MSIL will set up two units in two phases in the backward taluka of Mandal-Becharaji Amadavad district. The first unit (first phase) will be near the historical town of Becharaji and the second unit (second phase) will come up at a location of around 25km from Becharaji. 

The agreement was signed by Shinzo Nakanishi, MD and CEO, Maruti Suzuki, and Maheshwar Sahu, principal secretary (Industry and Mines), government of Gujarat, in the presence of Gujarat chief minister, Narendra Modi.

The expected investment in the plant is estimated to be around Rs 4,000 crore in the first phase. The facility, which will be commissioned by FY 2015-16, will have an initial annual capacity of 250,000 units. Along with Maruti’s existing plants at Gurgaon and Manesar, which have a capacity of 17.5 lakh units, the Mehsana plant will take total manufacturing capacity to 20 lakh units by 2015-16. 

Maruti expects to generate direct employment for over 2,000 people at the Gujarat facility while the ancillary units in the vicinity and a supplier park will generate additional employment. The company’s component vendors and ancillary suppliers are expected to invest in Gujarat at matching levels. Meanwhile, Maruti plans to continue to increase its production at the Manesar facility where a third assembly line (Manesar C plant, 2.5 lakh units annually) is expected to go on stream by the middle of 2013-14