New plants to be outside Haryana, says stir-hit Rico
23 Nov 2009
Rico Auto, a major component supplier to Maruti Suzuki, Hero Honda and Tata Motors, has said it will set up two new plants outside Haryana after a protracted labour strike at its four plants in the state crippled production for over two months.
Rico managing director Arvind Kapur today said in New Delhi that the move was in line with a demand raised by key customers who were affected by the 45-day strike at its Gurgaon factory. ''They want us to de-risk our operations to ensure uninterrupted supplies in case of any labour or industrial dispute in future,'' he said.
The Rs850-crore firm carries out its core casting business and manufacturing of engine components from its seven factories. The bulk of the production is from four plants located in Haryana's Gurgaon and Dharuhera automotive belts. These were virtually shut down by a labour strike in September and October, choking the production lines of Maruti, Hero Honda and Tata Motors as well as global clients like General Motors, Jaguar, Ford Motors and Nissan.
Rico also has some new facilities in Uttarakhand, Punjab and at Sanand in Gujarat, where Tata Motors' Nano car project is located.
The company, which produces engine, transmission, braking and suspension parts, is the sole supplier for a few components, which had impacted the operations of major auto maker like Maruti Suzuki and Hero Honda in the domestic market and Ford and General Motors overseas during the strike.
Kapur said that the company would soon start the process of looking for a ''suitable location'' for the new plants. However, he refused to answer on whether the new plants would come out of the Gurgaon-Manesar belt of Haryana, that has been the hotbed of labour disputes.
He said ''Rico's turnover and profits for the full year could see some impact due to the labour problems and loss of production at the Gurgaon factory.'' The company expects to clock a turnover of around Rs 950-1000 crore this year.
The strike at Rico's Gurgaon plant ended earlier this month after the management agreed to take back some suspended workers. The labour agitation at the company's plant had led to death of an employee, which had worsened the situation.
