MUMBAI: South Korean firm Hyundai Heavy Industries on Tuesday signed a memorandum of understanding (MoU) with Maharashtra Government for setting up a construction equipment plant in the state.
Hyundai would invest about Rs 260 crore in the proposed plant at Chakan near Pune. The MoU was signed by Maharashtra's Principal Secretary (Industries) V K Jairath and Hyundai Chief Operating Officer K H Park in the presence of Industries Minister Ashok Chavan here.
Hyundai would make hydraulic excavators in the Chakan plant and the production would begin in two years, Park said at a press meet after the signing ceremony.
Domestic demand in 2006-07 for hydraulic excavators stood at 7,000, according to Hyundai. The demand is expected to touch 30,000 units by 2015, Park said.
Besides excavators, the company would look at making other equipment as and when demand rises, he added.
Chavan said increasingly Korean companies were looking at investing in Maharashtra. Hyundai is the 46th Korean company to enter India's most industrialised state.
Two-way trade between India and Korea in 2006 touched USD 9.2 billion from USD 2.6 billion in 2002.
The Maharashtra government has identified the Hyundai Chakan plant as a "mega project". The Maharashtra government bought in the concept of mega projects in 2005.
In the last 18 months when mega project initiative was announced, the state has attracted 55 projects with Rs 48,000 crore-investment, Jairath said, adding the government looks at three criteria before giving such a status to a project.