HYDERABAD: Giving a major fillip to industrialisation in the backward Telangana region, Mahindra and Mahindra will soon set up a tractor manufacturing unit at its Zaheerabad facility in Medak district of Andhra Pradesh.

M&M has proposed to invest Rs 300 crore on the tractor manufacturing facility over the next three years that will provide direct employment to about 2,000 people and indirect employment to another 5,000 persons, company's Vice-President (Operations) V S Venkatraman said.

The proposed unit would manufacture 90,000 tractors per year and also 3 and 4-wheeler commercial vehicles, Venkatraman said.

M&M, world's largest manufacturer of tractors, will soon sign a Memorandum of Understanding with Andhra Pradesh Government to set up the new unit and commence the project work in the first week of November, government sources said.

The company currently has its automobile plant spread over 343 acres of land at Zaheerabad, 136 km from Hyderabad, where its products like UV (Maxx), 3-wheelers (Champion Alfa), Light Commercial Vehicles and buses are manufactured. It has employee strength of 641 and a vehicle assembly capacity of 218 vehicles per day.

M&M has not sought more land for the new unit saying it would be built on the vacant land at the existing unit.

Submitting M&M's latest proposal for setting up the tractor manufacturing unit, Venkatraman, however, wanted the state government to extend a 'special package of incentives' in view of the large employment-generation potential in the backward Telangana region, official sources said. Source: ET 4/10/10