Hero Moto’s Gujarat plant faces delay on land issues
“We are still acquiring land in Gujarat. Around 130 acres have been acquired from the government while another 120 acres are still in the acquisition process. The delay was because the state went to the polls towards the end of 2012. The Rajasthan plant would start in the second half of FY14, while the Gujarat plant should start in Q2, FY15,” CFO Ravi Sud said at an investor call following the announcement of Q3 results last week.
The plant was to start in the second quarter of FY14, according to the plan announced last June by MD & CEO Pawan Munjal after signing the state support agreement with Gujarat. The Gujarat plant was to start right after the fourth plant in Rajasthan began operations in the first quarter of the same fiscal. Combined with the three existing plants at Dharuhera, Gurgaon and Haridwar, these two new plants would take Hero’s totalcapacity to around 10 million units, from just under 7 million.
"The Rajasthan plant should take annual capacity to 7.7 million units in FY14, which should go up to 8.4 million units in FY15," Sud