COLOMBO: Lanka Ashok Leyland (LAL), a joint venture of Ashok Leyland of India and the Lankan public sector company, Lanka Leyland Ltd., has initiated a project to assemble small trucks in Lanka for the Indian market.
LAL’s CEO, Umesh Gautam, told Express here on Friday, that to serve the South Indian market, it will make sense to assemble such trucks in Sri Lanka and ship them to Chennai rather than supplying that market from Pantnagar in the Uttarakhand state of North India.
“The trucks will have to be brought over a distance of 2700 km. If, on the other hand, the assembly is done in Lanka and the trucks are shipped to Chennai, we can supply at one fourth the cost, ” Gautam reasoned. Free trade agreements would also help reduce the cost. SAFTA will enable export of these vehicles to other South Asian countries too.
Gautam, who has been in Lanka since 1982, said that the assembly plant at Homagama near Colombo has unused capacity after the Lankan government made it cheaper to import fully manufactured vehicles. A 20 percent duty had been imposed on parts meant for vehicle assembly.
The LAL plant in Lanka has trained manpower. It also plans to use local products like rubber, fuel tanks, batteries and seats. The plant already has about 30 local suppliers of auto parts.
Gautam said that the Lankan Minister of Transport had visited Ashok Leyland’s plant in Pantnagar and was convinced of the worthiness of the Lankan project.