Hero to invest Rs 3k cr in new Andhra unit

State govt has allotted 600 acres for the plant, which will have a capacity of 1.8 million units

This article has been modified. Please see the clarification at the end.
 

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.

Read more from our special coverage on "HERO MOTOCORP"

• Hero MotoCorp sales up 14% in March; sells over 6 lakh units
• Armed with new R&D centre, Hero to focus on premium bikes
• Hero MotoCorp declares interim dividend of Rs 40 per share
• Hero MotoCorp hits 52-week high on strong February sales
• Hero MotoCorp sales rise 14% in February

Hero has four manufacturing facilities, at Gurgaon and Dharuhera in Haryana; Haridwar in Uttarakhand; and Neemrana in Rajasthan. The two-wheeler major is also setting up another facility at 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.

CLARIFICATION
An earlier version of this article had mentioned that Hero MotoCorp was setting up a manufacturing plant at Neemrana in Rajasthan. The company has clarified that its Neemrana facility has been operational since October 2014. The error is regretted.