Caparo Group, a private company founded by one of Britain’s richest men, is to inaugurate a metal engineering plant in Madras next week, marking completion of the first stage of its £100 million expansion plan in India.

British-based Caparo, set up by Lord Paul, its chairman, is building a £40 million facility in the manufacturing corridor between Madras and Bangalore, India’s IT hub, to serve international and domestic manufacturers drawn to the business-friendly southern state of Tamil Nadu.

The 120-acre site, on which construction began 18 months ago, already produces sheet-metal components for the global car industry. Clients include Volvo, Ford, Tata Motors and Maruti Suzuki, India’s biggest carmaker. It also makes commercial tools. A forging facility should become operational next month and the entire plant fully commissioned by the middle of 2008.

The plant will employ about 2,000 people, or a third of Caparo’s global workforce, and is the group’s biggest single investment in India. Caparo has 12 facilities – all industrial except for a convention centre outside Delhi – in India and is to open 16 more.

Lord Paul, a Labour peer, was born in Punjab. He has lived in London for 40 years, but his Harrow-educated son Angad, who has executive control of the £1.4 billion Caparo, is turning its focus on growth opportunities in India.

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