HM to sell earthmoving division

By Our Staff Reporter

CALCUTTA, NOV. 13. Hindustan Motors plans to sell its earthmoving equipment division (HMEED) to Caterpillar Inc of the U.S. for Rs. 337.5 crores. As per an agreement signed between the two, the sale will include both the manufacturing facilities of the division and the engineering and education centres. The division has a turnover of about Rs. 355 crores and enjoys 50 per cent market share of dumpers and 70 per cent of loaders.

According to official sources, the division manufactures dumpers, loaders and track type tractors of its own design and under license from Caterpillar. The latter is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.

Caterpillar plans to manufacture off-highway trucks, wheel loaders and track type tractors at HMEED's Thiruvallur plant in Tamil Nadu. The Pondicherry unit will manufacture backhoe loaders. Hindustan Motors will continue the joint venture with Caterpillar in Hindustan Power Plus, manufacturing diesel engines and generator sets.

In a joint statement Mr. A. Shankara Narayanan, executive director of HM and Mr. E H. Kohutek, chairman and managing director of Caterpillar India, said the sale agreement would bring in a wider range of earth moving equipment in the Indian market.

PTI reports:

HM had started the earthmoving equipment division in technical support with an Austrian company 30 years ago and had later entered into a collaboration with Catterpiller. The division was not doing well for the past couple of years due to decreasing sales on account of recession in the infrastructural sector.

A final decision to sell off the division was taken by the board of directors of the company at a meeting today. Necessary approvals and also consents of lending banks and financial institutions and shareholders would be taken before finalising the deal, sources said.

- PTI

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