Hero MotoCorp $70 million HMCL Colombia SAS plant

Indian manufacturers are venturing out in good time. Expansion and estimated future sales sees Hero MotoCorp investing in manufacturing and assembly units to meet international sales targets.

Hero MotoCorp ColombiaHero MotoCorp’s global expansions plan spans 50 countries by 2020. It has now formed a wholly-owned subsidiary in Colombia, and started work on a manufacturing plant here. The foundation-stone was today laid by Mr.Pawan Munjal, Managing Director & Chief Executive Officer, Hero MotoCorp Ltd in the presence of senior reps of Colombian government, senior leadership team from Hero MotoCorp, and other associates.

Project cost stands at US$ 70 million. HMCL is investing US$ 38 million in CAPEX, the rest being used as working capital over the next 3 years. Equity investment is being made through HMCL’s wholly-owned subsidiary in Netherlands, HMCL BV.

Hero Colombia manufacturing plant spans 17 acres (68,000 sq meters) at Parque Sur Free Trade Zone at Villa Rica, Cauca, about 500 km south-west of Bogota. Hero Colombia manufacturing plant, HMCL Colombia SAS production is expected in mid 2015 with initial installed capacity of 78,000 units when operational in mid FY 2015-16.

Production capacity will be expanded to 150,000 units in 2nd phase. Hero MotoCorp is the 1st Indian two-wheeler company with a manufacturing plant in Latin America. At present, Hero two-wheelers sell across 19 countries including Peru and Ecuador in South America; Guatemala, Honduras, El Salvador and Nicaragua in Central America; Kenya, Mozambique, Tanzania and Uganda in East Africa; Burkina Faso, Ivory Coast, Congo and Angola in West Africa and Turkey, Egypt, Sri Lanka, Bangladesh and Nepal in Asia.

In partnership with local distributors, Hero has established assembly units in Kenya, Tanzania and Uganda in East Africa. New plants include the one in Colombia, and another in Bangladesh through a JV. Growth in global manufacturing base caters to Hero’s increased growth and sales in international markets.

In FY 2013-14, Hero MotoCorp sold 6.25 million two-wheelers. HMCL is also building a Centre of Global Innovation and Research & Design in India. By 2020, Hero MotoCorp aims to cross 100 million units in cumulative production, and annual bike and scooter sales of 12 million units. Hero is the first Indian two-wheeler company to reach the 50 million units production milestone. 20 manufacturing and assembly plants are planned in 50 countries by 2020.