World’s leading player in the two wheeler market, Hero Motocorp, has decided to strengthen its global withhold with some dominant expansion plans. One of the major strategies adopted is to invest a whooping amount of Rs. 2500 crore to set up some new plants and to build an incorporated R&D center. The company already has 2 plants prior to this in Haryana and one in Uttarakhand. The latest one will be established in Neemrana, Rajasthan and the next in Gujrat. For a start, Rs. 400 crore will be invested in the new integrated R&D center in Kukas, Rajasthan. With an area of 250 acres and employment opportunities for 500 engineers this would become the be the largest two-wheeler R&D center in India.
In the words of Mr. Pawan Munjal, MD and CEO, Hero MotoCorp ,"Now that we are on the threshold of becoming a truly global company, our initial focus is on markets where the volumes are large, and products can be sold with minimum changes. So right now, our existing products with suitable modifications will be made available in these new international markets."
With annual installed capacity of 7,50,000 units and 1000 employment breaks, the Neemrana plant will be in operation from 2014. For the fifth plant in Gujarat the company has signed a State Support Agreement (SSA) with Gujarat Government. The initial installed capacity will be 1.2 million and the same is expected to rise to 1.8 million in the next phase which will lead to direct employment to over 2000 people. This would require an investment of Rs. 1100 Crore and the plant will be in operation from the second half of 2014. In context of global growth, Hero MotoCorp is planning to start exporting to earlier unexplored nations of Central America and Nigeria. A proposal was also made to merge Hero MotoCorp investments, the investment branch of Hero Groups, into Hero Motocorp. However it is said the the merger will not affect Hero Motocorp, its shareholders and creditors.
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