The new plant at Oragadam will be the nucleus of global ambition of Royal Enfield, as the company is targeting the production of 1,50,000 units from the plant this current financial year.
Addressing reporters, after launching Royal Enfield’s commercial production from its new manufacturing facility at Oragadam on Tuesday, the managing director and chief executive officer of Eicher Motors Siddhartha Lal said that the Oragadam plant had begun with an installed production capacity of 1,50,000 units in the first phase. An initial investment of `150 crore had been made towards construction of the facility that would produce the full range of Royal Enfield motorcycles.
“Subsequently, work has already begun on the second phase of expansion at Oragadam, which is spread over 50 acres of land. This will increase the production capacity to 2,50,000 motorcycles by 2014,” he said. Royal Enfield has created a master plan that can take the eventual production here to over 5,00,000 per year.
He said Royal Enfield hadwitnessed a surge in demand in the recent past, recording a growth of over 50 per cent for each of the last two years. “We have been extremely successful in stretching the capacity of our existing 60- year-old plant to record levels, achieving production of over 12,000 motorcycles in the month of March 2013,” he added.
“This new plant has been benchmarked to achieve the highest level of quality and productivity. We have re-tooled many of the parts that make up our motorcycles — so that they are of exact accuracy and finish. The substrate quality of the sheet metal parts, for example, is now on a par with the best in the world; when these parts undergo the world-leading CED and paint process here at Oragadam, they will have a surface finish and life of the highest quality,” Lal added.
Talking about Royal Enfield’s future plans he said, “The ability to increase capacity fast and superior quality of motorcycles is a crucial step for Royal Enfield towards meeting its global ambitions. While we are adding new models and dealerships in the Indian market that are fuelling our growth, we are also working on building our presence globally. Higher investments into brand and distribution, as well as new products that are very appealing to international markets are going to be key for us to achieve global leadership in the mid-size motorcycle category.”
The construction at the plant commenced in February 2012 and with civil work continuing round-the-clock, it was completed in a record time of 11 months. In addition to increasing capacity, the Oragadam plant has been designed to optimise cost of production through relevant automation while retaining the human craftsmanship that is distinct to the iconic Royal Enfield motorcycles.
A path breaking new CED paint shop with painting capacity of 600 motorcycles per day has been installed in the plant. To ensure consistency and less wastage, a robotic painting system and powder coating system have also been added.
At the same time, processes such as the legendary pin-striping continue to be done through craftsmen who lend that special human touch to each motorcycle.
The vehicle assembly line at Oragadam comes with several features such as ergonomic assembly work stations, torque controlled tools with feedback device and a capacity of producing one motorcycle a minute, or over 800 per day on two shifts. Effective controls and process, right from material handling to review mechanisms, have been created on the backbone of a modern and strong IT infrastructure.In addition, chassis dynamometers and a 1.4 kilometre test track within the factory premises allows for the motorcycles to be thoroughly tested before they are dispatched for customers.
The Oragadam facility has been built with sustainability in mind, from the very beginning of the design stage, with several initiatives such as reduction of effluent generation at source and zero liquid discharge system of treatment. In addition, conservation of resources such as electricity, water and fuel has been given top priority. Even during the construction stage, the green concept was applied by using soil from within the site for filling, as well as using the ideal quantities of steel, concrete and cement.
The focus was also on creating efficient work spaces, equipment and utilities.
The plant also has a gender mix with 20 per cent of its workforce being women. It has also added nine more dealers this year in Tamil Nadu. The company has 11 company operated stores and 250 dealers in all major cities and towns.
The demand for Royal Enfield is so much that it nearly takes a waiting period of 18 months.
But when asked if that will come down, Lal said that depended on the demand from the market.