Royal Enfield to set up greenfield facility, ramp up existing capacity

Royal Enfield, the maker of Bullet motorcycles in the country and a unit of Eicher Motors Ltd, is planning to set up a new facility. The company has said the proposed facility would take care of the company’s requirements for the next 10 years.

Speaking at the sidelines of the ‘Sustaining Manufacturing Leadership of Tamil Nadu’ summit, organised by the Confederation of Indian Industry, Royal Enfield CEO, R L Ravichandran, said the company had decided on the new facility to meet growing demand and to bring down the waiting period, currently six months. While refusing to comment on the details of investment and capacity, he said the new facility will come in Tamil Nadu or Andhra Pradesh and the investment and location details will be decided in three months.

Besides this, greenfield facility, the company is also planning to ramp up its capacity at the Chennai plant by 20 per cent. "The investment on ramping up the capacity will be around Rs 25 crore," Ravichandran said. He added that in 2010, the company had sold 50,000 units and was likely to sell 65,000-70,000 units this year. The company’s turnover was Rs 500 crore and the growth has been 15 per cent, Ravichandran said.

Royal Enfield is also looking at increasing its exports to countries in Latin America, Africa and the West Asia, besides strengthening its presence in Europe and the US. Currently, exports contribute 6-7 per cent, Ravichandran said. Royal Enfield has, for long, dominated the 250 cc-and-above segment. According to the Society of Indian Automobile Manufacturers, an apex organisation representing vehicle and vehicle-engine manufacturers in the country, the total number of two wheelers sold between April and December 2010 was around 8.7 million units, of which Royal Enfield sold 38,458 units.