Hero MotoCorp to invest Rs 550 crore in two new facilities

Janaury 14, 2013: The country’s largest two-wheeler manufacturer Hero MotoCorp has kicked off construction of its fourth manufacturing plant and a new global parts centre (GPC) at Neemrana in Rajasthan.

The company is to invest Rs 550 crore in setting up the fourth facility and the GPC. Both the facilities are expected to be operational towards the end of FY’14.

Pawan Munjal, managing director and CEO, after laying the foundation stone of these two new facilities, said: “The commencement of work on the new plant is clearly indicative of our intention and strategy for the future. Thanks to overwhelming demand for our products, we have been consistently clocking in excess of 500,000 unit monthly sales on an average. We foresee a revival in market sentiments sooner than later, and when it happens, we will be ready to meet the upsurge in demand.”

According to Munjal, the state-of-the-art global parts centre will be spread over 35 acres at Neemrana and will be highly mechanised and technologically superior, setting a new industry benchmark once it becomes fully operational. The Neemrana plant, spread over an area of 47 acres, will provide direct employment to over 1,000 people, and have an installed capacity of 750,000 units per annum.

The GPC, which is expected to be operational in the third quarter of the next financial year (2013-14), will initially employ 400 people. The GPC will have an automated storage and retrieval system, automated packaging and sorting system, on-line tracking of parts through warehouse management system, lean manufacturing systems and will be built on the green building concept. Last year, Hero MotoCorp had announced an investment of over Rs 2,500 crore in expanding capacity at its existing plants, setting up two new plants (one at Neemrana in Rajasthan and the other in Gujarat) and an integrated technology and R&D centre at Kukas in Jaipur.

Aiming at 10 million capacity

For Hero MotoCorp, the two new plants will help augment its total installed capacity to nine million units in two years, which is in line with the company’s objective of reaching 10 million units in the next five years.

The two-wheeler manufacturer currently has a total installed capacity of 6.15 million units in its three plants at Haridwar (Uttarakhand), Dharuhera and Gurgaon (Haryana). The company will also invest Rs 500 crore in expanding existing capacity, mainly at the Haridwar plant.

SHOBHA MATHUR