Land delays hit Hero MotoCorp's plans for Gujarat facility.

Hero MotoCorp's much awaited announcement of its fourth two-wheeler facility in Gujarat may be facing a delay of a few months on land acquisition hurdles. According to certain State Government officials, though most of the land parcel has already been acquired, there is a delay in the purchase of a last, small plot from private parties. The new plant is expected to come up on a 300-acre plot close to General Motors' car plant in Halol, in central Gujarat. “We expect an announcement on the plant within a month as it is in the advanced stages. They have said that they are coming here and we think the issues will be cleared soon,” a top Gujarat Government official said. When asked about an update, a company official said Hero MotoCorp would not comment on the development. In March, Mr Pawan Munjal, Managing Director at Hero MotoCorp had told Business Line that an announcement would be made in the same month. However, this formal company declaration is still awaited. Export-focussed More recently, in the investor call after the FY12 financial results in April, company CFO, Mr Ravi Sud, had said that an announcement on the new plant would be made “very, very soon”. With an expected investment of Rs 1,200 crore and a two-million-unit initial annual capacity, the export-focussed Gujarat plant would join its two existing manufacturing facilities in the Gurgaon-Manesar belt and a third in Haridwar. Additionally, a fifth plant is also expected to be announced in the near future, with Karnataka expected to be the likely destination. In the same State, erstwhile partner Honda Motor recently announced its own two-wheeler plant (near Bangalore). At present, the annual production capacity across three plants is at 6.6 million units. This is expected to go up to 7 million units by July-August. With plants to actively expand exports to Africa and South America from the current quarter, the two wheeler maker expects to grow above 10 per cent in FY13 (sales rose 15 per cent in FY12). Hero MotoCorp shares at the BSE were down 1.86 per cent to Rs 1,826.20 on Wednesday.