Hindustan Motors develops comprehensive revival and renewal proposal

Hindustan Motors Ltd has announced that the Company has developed a comprehensive "Revival & Renewal Proposal" that would bring its Automotive Industrial Complex at Uttapara back to profitability & financial health. The proposal envisages the following:

- Diversifying & Expanding into the Auto Component Sector by developing a modern & large sized Automotive Forgings & Automotive Castings & Automotive Stampings, business by cost effectively leveraging existing facilities & infrastructure.

- Sustaining the existing vehicle business by expanding range and upgrading technology.

- Transformation of work practices in line with best in class in the auto industry - to achieve competitiveness in Quality Cost & Delivery.

McKinsey & Co. and other reputed consultants have forecast auto component exports from India to grow manifold from current levels of $ 1.5 Billion; Uttarpara is well placed to ride this growth wave. The Company has piloted this approach over the past few months and response from OEMs, both in India & Europe has been heartening.

The Company´s Uttarpara (UTP) facility was established in 1948 and developed as a fully integrated automotive Industrial complex & township. For many decades this plant has been a significant contributor to the State of West Bengal by bringing in technology & capital, generating direct & indirect employment and contributing through direct & indirect Taxes. Post liberalization and opening up of the economy, this unit handicapped by legacy costs & systems, experienced a whole new set of challenges and sustained financial stress. Given this back drop to fund the expansion and diversification program, the Company had applied to the State Government, seeking permission for alternate use Of 314 acres.

It has been reported that West Bengal Govt. through a communique to a syndicated news agency, has indicated that the above application is being approved, under the West Bengal Industrial Renewal Scheme 2001 & as per West Bengal Land Reforms Act 1955. The company is awaiting formal communication.

The Company´s application envisages development of 314 acres of land, over a 4-5 year period, into a World Class Integrated IT & ITES Township and Auto Anciliary Park. IT, ITES & Auto Ancillary are three of the fastest growing sectors and such a development will also maximize socio-economic benefits to Uttarpara and the neighbouring belts.

Source : Equity Bulls

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