Hero MotoCorp, the country's largest two-wheeler manufacturer, is aggressively growing its manufacturing capacity. The company, which currently has an installed production capacity of 9.2 million units across five plnts in India, today laid the foundation stone of its eighth manufacturing facility at Chittoor in Andhra Pradesh.
The new project involves an investment of Rs 1,600 crore for the state-of-the-art plant which will generate 12,000 new job opportunities in the state of Andhra Pradesh. The chief minister of Andhra Pradesh N Chandrababu Naidu and Pawan Munjal, chairman, MD and CEO, Hero MotoCorp, laid the foundation stone of the new facility in Sri City today.
“Hero MotoCorp has been expanding its global footprint across continents with new markets and state-of-the-art manufacturing facilities. With the commencement of construction of our new manufacturing plant at Chittoor in Andhra Pradesh, we are bringing the same global benchmark of sustainable eco-friendly green manufacturing to the state,” said Pawan Munjal.
Pawan Munjal: "This facility will take up our total combined installed capacity to 11 million units of motorcycles and scooters per annum, which is in line with our vision of surpassing the landmark 10- million unit volumes by 2020."
Setting up a supplier base in Andhra Pradesh
“When fully operational, this facility will take up our total combined installed capacity to 11 million units of motorcycles and scooters per annum, which is in line with our vision of surpassing the landmark 10- million unit volumes by 2020. In addition to building a state-of-the-art facility, we are committed to creating a world-class manufacturing eco-system in the region, with a base of globally benchmarked vendors and suppliers, which will together generate over 12,000 new jobs, thereby accelerating the socio-economic progress in the state,” added Munjal.
N Chandrababu Naidu said, “I am very glad that Hero MotoCorp – the world’s largest two-wheeler company – is setting up a manufacturing facility in our state, the company’s first such manufacturing unit in southern India. People of our state are going to benefit immensely from this venture, as Hero will bring world-class manufacturing practices, new modern technology and global systems and processes in Andhra Pradesh. This yet again establishes Andhra Pradesh as the preferred investment destination in the country for large corporates. I welcome Mr Pawan Munjal and the Hero family to our state, extend our support to them for the future and look forward to a mutually beneficial association.”
Readying for future demand
The new plant in Chitoor will be Hero MotoCorp’s eighth manufacturing facility; the company already has five plants in India (Haridwar in Uttarakhand, Gurgaon and Dharuhera in Haryana, Neemrana in Rajasthan and Vadodara in Gujarat) and one each in Colombia and Bangladesh.
Hero’s combined installed production capacity currently stands at 9.2 million units per annum, which is highest in the country.
Plant 1: Haridwar (Uttarakhand) - 2.7 million units per annum
Plant 2: Dharuhera (Haryana) - 2.1 million units per annum
Plant 3: Gurgaon (Haryana) - 2.1 million units per annum
Plant 4: Neemrana (Haryana) - 1.1 million units per annum.
Plant 5: Vadodara (Gujarat) - 1.2 million units in Phase 1, 1.8 million units in Phase 2.
Plant 6: Chittoor (Andhra Pradesh) - 1.8 million units by end-December 2019.
With the additional capacity from the new plant, Hero's total manufacturing capacity will stand expanded to 11 million units by early 2020.
To be developed over a 600-acre site in the Chittoor district of Andhra Pradesh, the new facility will have an annual installed capacity of 1.8 million units, which will be achieved in three phases.
The company will invest Rs 1,600 crore in setting up the manufacturing facility, which is expected to be operational before December 2019. It will generate 2,000 jobs and an additional 10,000 employment opportunities through the creation of a manufacturing eco-system of vendors and suppliers in the region.
Export hub in the offing
Given the plant's strategic location, it is likely that it could become a key hub for Hero MotoCorp to export its range of products to some of its key overseas markets.
According to the company, the Chittoor plant will embrace sustainable manufacturing practices ranging from energy efficient building envelope, to the Big Foot air handlers, to water and energy optimisation.
Given the rapid pace of growth of the domestic two-wheeler industry, most OEMs are running at peak capacity and the next couple of years should see majors either set up new plants or expand capacity at existing plants. The No. 2 player, Honda Motorcycle & Scooter India currently has an installed manufacturing capacity of 6.4 million units while TVS Motor Co has 4.5 million units per annum.