BMW plans Rs 180 cr plant in Chennai

Representatives from two European companies - BMW and Saint-Gobain - on Tuesday met Tamil Nadu chief minister J Jayalalithaa in connection with their foreign direct investment plans in the state.

Between these two companies, the state will witness FDI of up to Rs 880 crore (Rs 8.8 billion).

A state government release said that a seven member delegation led by Jacques Aschenbroich, chairman and president, Saint-Gobain Vitrage, met Chief Minister Jayalalithaa regarding the setting up of their float glass project at Sriperumbudur Industrial Park.

Saint-Gobain India has invested Rs 700 crore (Rs 7 billion) to set up its second float glass plant and an automotive glass plant in Sriperumbudur, near Chennai.

The automotive glass plant commenced commercial operations in July 2005, while the float glass plant is expected to start commercial operations in the last quarter of 2005.

The company had already invested Rs 525 crore (Rs 5. 25 billion) in setting up a plant in Sriperumbudur. The expansion is meant to take Saint-Gobain's float glass capacity to 1,500 tonne a day.

Earlier in the year Saint-Gobain India's managing director B Santhanam said that the expanded manufacturing facility would be the largest integrated glass complex within the Saint-Gobain group.

An eight member team from BMW led by Norbert Reithofer, board member of BMW Group, on Wednesday informed the state government that it proposed to establish a car assembly plant at a cost of Rs 180 crore (Rs 1.8 billion) in the Mahindra Industrial Park, about 35 kilometers from Chennai airport.

The state government press release said that BMW proposed to commence its project construction as soon as it got the awaited approvals from the central government.

Its commercial operations is expected to start in the third quarter of 2006. BMW has decided to set up its operations in Chennai after taking a look at over 10 centres in India.

It becomes the third overseas auto major after US's Ford Motor and South Korea's Hyundai to set up shop in Tamil Nadu in the recent past.

BMW's assembly unit in Chennai would carry out the assembly of completely knocked down car parts and kits. The company is also expected to import completely built units of certain models.

BMW was incorporated in India in 1997. For a while the company had a joint venture on with the Hero group.