Millat Tractors Limited’s top brass has decided to spread its wings in the local automobile industry to manufacturing cars and commercial vehicles, as it showed its interest to acquire up to 18 percent stakes in the newly formed Hyundai Nishat Motors Company.
According to the stock filing, the leading local manufacturer of tractor was approached by the management of Nishat Mills Limited to avail the opportunity in the new automobile company, Hyundai Nishat Motors Company, along with its capital and expertise in the automotive business.
In the response, the board of directors of Millat Tractors Limited has given a green signal to its management for getting a shareholding of upto 18 percent in Hyundai Nishat Motors Company, which is a joint-venture of Nishat Mills Ltd and Sojitz Corporation, Japan.
In this connection, Millat Tractors Limited has signed a letter of intent (LoI) with Hyundai Nishat Motors Company, a stock filing added.
The expansion of Millat Tractors Ltd in the manufacturing business of passenger cars and commercial vehicles sounds positive for the new forming company in particular and for industry in general.
The tractor manufacturer has a strong grip over its sector, which is likely to have good synergy with Hyundai Nishat. The company is operating with countrywide dealers’ network, local vendors and trained human resources for past many years.
Millat Tractors Ltd has been strong financially and it witnessed substantial growth in its sales and profit by 92 percent and 126 percent respectively in the first quarter of 2017-18. It recorded a benchmark of 10,000 units and over Rs 1 billion profit.
Recently, Hyundai Nishat Motors Company has been given an approval to set up a greenfield project to undertake assembly and production of passenger and commercial vehicles from its plant based in Faisalabad.
The company has entered into an investment agreement with the Ministry of Industries and Production under Automotive Development Policy 2016-21 to set up a greenfield project to carryout assembly and sale of passenger and 1,000 commercial vehicles in Pakistan, according to the stock filing by the parent company, Nishat Mills Limited.