Maruti Suzuki to establish its third plant at Manesar

New Delhi: The country's largest passenger carmaker Maruti Suzuki is understood to have considering setting up a third plant at its Manesar unit that can entail an investment of about Rs1,700 crore, reports PTI.

According to industry sources, the company is mulling an additional plant that will have an annual capacity of rolling out 2.5 lakh units per year.

At present, the company is investing a similar amount of Rs1,700 crore to increase the capacity at its Manesar plant by 2.5 lakh units that will be operational by 2012.

"The third plant at Manesar is likely to have almost the same investment and capacity as the second one," a source said at the Society of Indian Automobile Manufacturers (SIAM) summit here today.

When contacted, a Maruti official declined to comment saying that the company is currently focusing on the second plant.

Maruti Suzuki India's Manesar plant has annual production capacity of three lakh units, while the Gurgaon plant produces seven lakh units per annum.

Recently the company's managing director and CEO Shinzo Nakanishi had stated that the Indian car market is likely to double to five million units by 2015 and the company needs to be prepared to meet the growing demand in order to maintain its leadership position.

According to SIAM, the market leader sold 2,82,488 cars during the April-July period this, representing a 47.68% share in the overall 5,92,405 units market.

In the comparable year-ago period, MSI had a 53.13% share in the 4,40,069 units car market, with sales of 2,33,811 units.

However the company was hopeful to regain an over 50% share of the domestic passenger car market by the end of this fiscal.

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Govt may allocate gas to RCF from ONGC instead of RIL

New Delhi: The government may give Rashtriya Chemicals and Fertilizers (RCF) natural gas from Oil and Natural Gas Corporation’s (ONGC) western offshore C-Series fields in place of cheaper KG-D6 gas it currently gets from Reliance Industries (RIL).

RCF currently buys 0.95 million standard cubic meters per day (mmscmd) of KG-D6 gas at $4.205 per million British thermal unit (mmBtu) for use as feedstock at its Trombay plant and another 2.1 mmscmd for its Thal unit.

The government plans to replace KG-D6 gas at these plants with the fuel being produced by ONGC from its C-Series fields, which is priced at $5.25 per mmBtu, official sources said.

This follows government allocations far exceeding the supplies from KG-D6. While the government has allocated users for about 64 mmscmd of KG-D6 gas, Reliance says it can currently produce only 60 mmscmd on sustained basis.

The mismatch between the allocation and actual production forced the government to switch users like RCF to ONGC, they said, adding ONGC is to produce between 2.1 and 3 mmscmd from the C-Series fields.

The delivered price of KG-D6 gas in the Trombay region is $6.52 per mmBtu ($4.205 per mmBtu plus $0.135 for marketing margin, $0.87 towards central sales tax of 2%, $1.45 for transportation through East-West pipeline and $0.64 per mmBtu tariff of GAIL's pipeline).

On the other hand, the ONGC gas would cost RCF $6.76 per mmBtu ($5.25 plus $0.12 for marketing margin, $0.64 in transportation tariff through GAIL pipeline and $0.75 per mmBtu in local sales tax of 12.5%).

Sources said while KG-D6 was an inter-state sales attracting a central sales tax of 2%, ONGC gas sales would attract Maharashtra government sales tax.

The gas vacated by RCF would go to companies like Essar Oil's Vadinar oil refinery in Gujarat, which has so far not been able to sign contract with Reliance for the 0.6 mmscmd that was allocated to it.

Sources said Reliance has told the oil ministry that it can at present sustain output of only 53-54 mmscmd from the Dhirubhai-1 and 3 fields in the KG-D6 block and 7-8 mmscmd from the MA field in the same area.

The company had in December last year tested facilities at KG-D6 for a peak production rate of 80 mmscmd, but it estimates this level of production can only be achieved in 2012.

Of the current production, about 14 mmscmd is sold to fertilizer plants, 28 mmscmd to power plants and 10 mmscmd to petrochemical plants and refineries. The remaining seven mmscmd of gas was consumed by other sectors such as sponge iron plants, LPG, city gas distribution and the East-West pipeline.

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