Suzuki Motor to acquire 26% in NDDB’s bio-gas venture

Suzuki Motor Corporation has decided to acquire 26 per cent in NDDB Mirda Ltd — a bio-gas venture of the National Dairy Development Board (NDDB) — as part of its plans to use compressed bio-gas (CBG) for its vehicles.

The deal also allows Suzuki to gradually raise equity in NDDB Mirda to 49 per cent.

“Suzuki got interested in our bio-gas plants because they want to focus on sustainability of vehicles through CBG and compressed natural gas (CNG). They believe that both CBG and CNG are the best solution for environment-friendly vehicles. They conducted some tests and found that the compressed bio-gas produced from (cow or cattle) dung is much better than bio-gas from other sources for the longevity of vehicles and engine performance. This was an in-house study,” Meenesh Shah, Chairman, NDDB, told businessline at the Board’s headquarters at Anand.

“As of now, Suzuki will invest to acquire 26 per cent equity in NDDB Mirda Ltd and the rest will remain with NDDB. This equity transaction will be at par. We have thought of ₹300 crore equity capital. However, we will begin with an initial investment of ₹34 crore, wherein Suzuki will invest ₹8.84 crore, while the remaining ₹25.16 crore will be invested by NDDB. This will be increased gradually as per requirements,” he said.

Suzuki had earlier sought 49 per cent equity in NDDB Mirda Ltd but the Centre allowed the company to take 26 per cent.

“Initially, Suzuki approached NDDB and we involved Banas Dairy and an MoU was signed so that work could be done by us together in this domain quickly.

“Suzuki wanted to tap NDDB’s rural network for setting up multiple CBG production centres in the villages of Gujarat where Maruti Suzuki Eeco vehicles ply in large numbers.”

“Initially, to support the CBG plant developed by Banas Dairy, four units were proposed to be built by Suzuki through its CSR initiative. The model was that NDDB will set up the CBG plants, Banas Dairy will operate the plants and Suzuki will provide all the funding. Going forward, both Banas and Suzuki will share the profits,” Shah said.

Per the MoU inked between Banas Dairy, Suzuki and NDDB in September 2023, four dung-based CBG plants were to be set up at Dhanera, Vadgam, Diyodhar, Deesa and Tharad in Gujarat’s Banaskantha district. Currently, work is on at the four CBG plants.

“After Banas Dairy, among milk producers unions in Gujarat, Sabar Dairy, Dudhsagar Dairy and Panchmahal Dairy want to set up CBG plants. We have convinced Suzuki to provide CSR funds for them,” the NDDB Chairman said.

Source: Dairynews7x7 Jan 8th 2025 Hindu Businessline