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Hero MotoCorp to invest Rs 3,000 cr new facility in AP

Hero MotoCorp is setting up a new manufacturing facility in Andhra Pradesh, in which it plans to invest Rs 3,000 crore.The plant will have a of capacity of 1.8 million units. Andhra Pradesh Chief Minister N Chandrababu Naidu will be laying foundation stone for the new facility next month.

The automobile firm has three manufacturing facilities -- at Gurgaon and Dharuhera in Haryana and Haridwar in Uttarakhand. The two-wheeler major is 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 of land at Tada in Chittor district, on the border of Chennai, which is one of the largest automotive 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 come close to SriCity, an industrial township. However, land allocation had become a legal issue after a petition was filed by a Chennai-based company claiming that it had obtained interim injunction orders in 2007 from the Court when the state government attempted to procure its lands.

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.