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Dhaka Tribune

Hero launches operation in Bangladesh to manufacture motorbikes

Update : 21 Apr 2014, 08:14 PM

Hero MotoCorp Ltd (HMCL) – the world’s largest two-wheeler manufacturer – yesterday launched its operation in Bangladesh through a joint venture with Nitol Niloy Group.

To make it effective, a deed was signed between the two companies in Dhaka. Managing Director and Chief Executive Officer of Hero MotoCorp Pawan Munjal and Chairman of Nitol Niloy Group Abdul Matlub Ahmad signed the agreement on behalf of their respective companies.

Industries Minister Amir Hossain Amu and Acting High Commissioner of India in Dhaka Sandeep Chakravorty and Managing Director of the Group Abdul Musabbir Ahmad were present at the signing ceremony.

Under the deal, the two companies will set up a plant in Gazipur at an investment of $40m or Tk311 crore to produce 1.5 lakh motorcycles annually by 2016.

Hero will hold majority stake of 55% in the new joint venture while the Nitol Niloy Group will hold the rest 45% stake. There will be a total equity injection of $12.6m in a ratio of 55:45 over a period of two years.

The new venture will have a capital expenditure of $23.2m in the first year of its operation (financial year 2014-15) and the total investment of $40m over the next five years.

While the manufacturing plant will be operational by the second quarter of 2015-16, the Hero range of two-wheelers are already being made available in Bangladesh through the initial 50 retail outlets. More outlets are also being rapidly added in markets across the country.

After expiry of the deal with Japanese automaker Honda in 2011 and state-owned automobile company Atlas Bangladesh in 2013, Hero now joined hands with Nitol-Niloy Group for producing motorcycle in Bangladesh.

Pawan Munjal said the commencement of our operations in Bangladesh is a significant milestone in our strategic global expansion plan. In addition to being our first overseas joint venture, this is also where our first manufacturing plant outside of India will come up, he said.

He said once operational by the second quarter of 2015-16, the plant will have an annual capacity of 150,000 units. “We are aiming to have around 20% of market share here in the first year of our operation.”

While Hero MotoCorp has rapidly expanded its global footprint, this is the company’s first overseas joint venture to set up a two-wheeler manufacturing plant outside of India, since it commenced its solo journey almost three years ago.

The range of Hero two-wheelers being made available in the country include successful models like the entry-level segment 100cc bikes – HF Dawn and HF Deluxe, Splendor+, Splendor Pro, Splendor iSmart, Passion Pro, the deluxe segment125cc Super Splendor and Glamour and the premium segment 150cc Xtreme and Hunk, and the 100-cc scooter Pleasure.

Hero has launched an unprecedented 5-year warranty on all these models in Bangladesh – a statement of confidence in the technological superiority of its products.

Hero MotoCorp (formerly Hero Honda Motors Ltd) will soon launch brand-building initiatives in this market with the Bengali version of the iconic Hero anthem “Hum Main Hai Hero” (There’s a Hero in Each of Us), which will be aired across television platforms in Bangladesh. “There will also be brand-specific communications to establish Hero products in the country.”

As of today, Hero two-wheelers already sell in as many as 18 countries.  

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