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Hero to invest Rs 3k cr in new Andhra unit

Business Standard:  April 26, 2016

New Delhi:  Hero MotoCorp is setting up a factory in Andhra Pradesh. It plans to invest Rs 3,000 crore, for annual capacity of 1.8 million units. Chief Minister Chandrababu Naidu will be unveiling the foundation stone next month.

Hero has three manufacturing facilities, at Gurgaon and Dharuhera in Haryana and Haridwar in Uttarakhand. The two-wheeler major is also setting up two more facilities, at Neemrana in Rajasthan and Halol in Gujarat.

For the new facility, the state government has allocated around 600 acres at Tada in Chittoor district, close to Chennai — the latter is one of the largest automotive manufacturing hubs in the country. Last September, the company signed an MoU with the Andhra Pradesh government to allot 600 in Chittoor district to the company.

The facility will be close to SriCity, an industrial township. The allocation for this site has been the subject of a court battle already, with a Chennai-based company contesting it. Hero had to get a stay on construction removed via a high court order before it could erect a wall around the 600 acres it was allotted.

According to reports, the petitioner moved the High Court alleging that the AP government has failed to follow the provisions of fair compensation, transparent land acquisition and rehabilitation and resettlement. While a single judge delivered a verdict, a division bench stayed the order, which came as a big relief for Hero MotoCorp from the Hyderabad High Court, which vacated a stay on the construction work and allowed the two-wheeler maker to erect a wall around the 600 acres it was allotted.

With these developments, the company has decided to start construction of the factory. While the company did not disclose any numbers till now. Last September, the AP government successfully wooed Hero MotoCorp and the facility will cater both domestic and export markets.

Hero MotoCorp proposed to build its sixth facility with a capacity of 1.8 million units with an estimated investment of Rs 3,000 crore. The new facility will take Hero's overall annual capacity of 12 million units.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.