India's Tata Motors to set up truck plant in Burma

Mizzima News, 23 March 2010.

New Delhi (Mizzima) - Tata Motors, ‘India's largest automobile company’ has signed a contract with Myanmar (Burma) Automobile and Diesel Industries Ltd. under the Ministry of Industries - 2, to set up a heavy truck unit in the military ruled country.

“The MADI is setting up a heavy truck plant at Magwe under the line of credit (LoC) from the Government of India,” Mr. Debasis Ray, the Head of Corporate Communication, Tata Motors told Mizzima.

“We have been asked to implement the project by the central government (India) so we are signing the turnkey contract with the Myanmar (Burma) Automobile and Diesel Industries Ltd,” said Ray.

Ray further said that “the plant will become operational in quarter of 2010/11”.

Tata Motors will set up the plant in Magwe approximately 480 kilometres from Rangoon.

“The company will be employing Burmese employees, and the plant would have a capacity of 1,000 units annually at the beginning, which can be expanded to 5,000 vehicles per year,” added Ray.

“The product of this plant ‘that is heavy trucks’ will be utilized in Burma,” said Debasis Ray. The company evaded giving financial details when asked.

Burma ruled by the military Junta since 1962 is facing economic sanctions imposed by Europe and United States because of its human rights records and long detention of its democratic leader Aung San Suu Kyi. But the impact of the sanctions has been weakened as neighbours such as India, China and Thailand have invested large sums, particularly in its oil and gas industries.

Analysts see this pact as part of India's "Look East Policy", in which economic and strategic initiatives are undertaken with South-east Asian countries, to boost its presence as a regional superpower.

Media reports said last December, bilateral trade between India and Burma is likely to grow to one billion dollars in 2009-10, from 951 million dollars in 2008-09.

Tata Motors is India's largest automobile company; with consolidated revenues of US$ 14 billion in 2008-09. Tata Motors has operations in the United Kingdom, South Korea, Thailand and Spain.

It is also the world's fourth largest truck manufacturer and the second largest bus manufacturer. Tata cars, buses and trucks are being marketed in several countries in Europe, Africa, the Middle East, South Asia, South East Asia and South America.

It is at home that Tata Motors ran into rough weather, when it was given land by the West Bengal Government in Singur to set up its plant for its much hyped small and cheap car, the Nano. Trinamool Congress chief and now Railway Minister, Mamata Banerjee led an agitation against Tata Motors and the state government demanding that the company return a portion of the acquired land to unwilling farmers. The agitation took such dimensions that the Tata’s abandoned the project in West Bengal and rolled out the car from Gujarat instead.

When Mizzima’s reporter asked the Tata company official how they plan to acquire the necessary land for building the truck plant in Burma, he evaded an answer and said that the Burmese government needs to answer that question. The Burmese junta as a rule just confiscates land it needs for such big projects or less.