The Hindu Business Line : Hero Honda to set up new plant in Uttaranchal

Looking ahead
The plant and its main ancillaries would be located on a 275-acre plot at the Integrated Industrial Estate in Haridwar.
It will help the company achieve an annual production capacity of 44 lakh units by May 2007.
Hero Honda is the second major bike company, after Bajaj Auto, to set its foot in the hill State.

New Delhi, Aug. 8

Hero Honda announced on Tuesday its new plant in tax haven Uttaranchal to be operational by May 2007, where the auto major will invest Rs 1,900 crore along with ancillaries by 2010.

The company, which currently has two plants in Haryana, said the Uttaranchal plant would start with an initial capacity of 5 lakh units to be scaled up to 15 lakh by 2010.

The Hero Honda plant and its main ancillaries would be located on a 275-acre plot at the Integrated Industrial Estate in Haridwar, being developed by State Industrial Development Corporation of Uttaranchal Ltd. The company will start with an initial investment of around Rs 300 crore.

The plant will help it achieve an annual production capacity of 44 lakh units by May 2007. The company is already expanding capacity at its existing plants in Gurgaon and Dharuhera by an additional 9 lakh units that will be completed this month.

Interestingly, the Uttaranchal plant seems to be getting primacy over a proposed plant at Jaipur, where the company is facing problems.

Excise, IT exemption

Hero Honda is the second major bike company, after Bajaj Auto, to set its foot in the hill State that offers 100 per cent excise exemption for 10 years and 100 per cent Income-Tax exemption for the first five years and 30 per cent for the next five years, among other benefits. Other auto companies that have entered the State include Tata Motors and Mahindra and Mahindra.

The Hero Honda Managing Director, Mr Pawan Munjal, said the company had a strategy of consolidating market leadership through growth in the domestic and export markets.

Future plans

``We will be launching seven new models this year and have similar plans for the future, to offer customers an unparalleled range of latest two-wheelers that will offer the world's best technology, latest design options and many exciting new features,'' he said.

Further, the company said that the "location has been chosen taking into consideration a number of factors including the existing support infrastructure available and the tax sops offered by the Government for setting up manufacturing units in the hill States,'' adding the tax breaks would benefit the company to ``significantly improve operating margins''.

More Stories on : New Projects | Two/Three Wheelers | Hero Honda Motors Ltd

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