Ashok Leyland gearing up in RAK

The company plans to ramp up capacity at its 20,000-square metre facility to 6,000 vehicles a year from 2,000 currently. It will assemble 10 lorries and 25 buses a day.

Ashok Leyland is investing US$10 million to expand capacity by 200 per cent in Ras Al Khaimah. Jeffrey E Biteng / The National

The Indian commercial vehicle maker Ashok Leyland is investing US$10 million to expand capacity by 200 per cent in Ras Al Khaimah as it eyes exports.

The company, known for its ubiquitous white buses that transport workers in the UAE, plans to ramp up capacity at its 20,000-square-metre facility to 6,000 vehicles a year from 2,000 currently. It will assemble 10 lorries and 25 buses a day.

It is also setting up a design and training centre.

“We will make the UAE our hub of international operations and export to Middle East, Africa and CIS countries from here,” said Dheeraj Hinduja, the chairman of Ashok Leyland, in RAK yesterday. “We have already committed $60 million [here] and there will be more.”

The company is this month also moving its international operations headquarters to Dubai from Chennai.

Employing 700 people in RAK, it expects to hire 300 this year, according to Vinod Dasari, Ashok Leyland’s managing director.

The company downplayed the effect of the slowdown in the construction sector, and the strong US dollar that could potentially hurt exports.

“Everybody is hurt by the economy, but we have to be flexible and nimble-footed,” he said.

While demand from UAE and Qatar is steady, demand from Saudi Arabia is down by about 80 per cent, he said.

This year so far, the company has been supplying 20 to 30 vehicles a month to Saudi Arabia, compared with 150 vehicles a month last year.

In a survey from the law firm Pinsent Masons in December, just 32 per cent of construction companies in the GCC reported an optimistic outlook, compared with 77 per cent the year before. While the UAE and Qatar were seen as more positive markets, optimism in Saudi Arabia dropped to 12 per cent compared with 40 per cent the year before.