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Old 22nd March 2010, 18:09   #1
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Default Tata to construct new Heavy Trucks plant in Myanmar

From Tata Motorís Press Release

Tata Motors to construct heavy truck plant in Myanmar
under Government of Indiaís Line of Credit

Mumbai, March 22, 2009: Tata Motors today signed a turnkey contract with Myanmar Automobile & Diesel Industries Limited (MADI), an enterprise under the Government of Myanmarís Ministry of Industry-2, for setting up a heavy truck plant, at Magwe, approximately 480 km from Yangon, funded by a Line of Credit from the Government of India.

The facilities planned at the plant include a highly flexible chassis & frame assembly line along with a cab manufacturing, painting & trimming set-up. The plant is expected to become operational by the last quarter of 2010-11, with a capacity of 1,000 vehicles per year. The capacity can be expanded to 5,000 units.
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Old 26th March 2010, 12:51   #2
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What does this essentially mean?

Does it mean we are taking the american way of funding a country and then prodding it to use the money to buy exclusively from our companies? Americans do this very regularly. They will give you military assistance and then expect you to buy your warplanes using that money from Lockheed Martin or Boeing. The countries like India use (or rather earlier used to make use of) whatever little bargaining space they had to ensure that the american company sets up it's manufacturing plant or at least some part of it here so that the money is again ploughed back into the economy. If it is indeed so then probably it shows our maturing responses on the world hightables of economic and financial diplomacy.

It can also mean something less palatable. Tata's do not think it is worthwhile to setup a plant in Myanmar (not viable?!!). However the Myanmar government (Junta as they call the military govt.) feels it needs to have it's own heavy vehicle manufacturing capabilities. So it takes the funding from GOI and then uses that to fund the plant's running expenses. I have never heard of a private enterprise being funded by a sovereign government unless it is doing some cutting edge R&D that's worth the bucks for the country or else the private entity has been roped in by the government into something which does not make economic sense for the entity otherwise.
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