Hero MotoCorp goes to Bangladesh.

Hero MotoCorp, India's largest two-wheeler maker, recently announced a joint venture with Bangladesh's Nitol Niloy group. The two companies plan to invest around Rs. 240 crore over the next five years.

The joint venture, in which Hero MotoCorp will hold a 55 per cent stake (with Nitol Niloy holding the rest), will set up a new manufacturing facility by the second quarter of 2015-16. The unit will have an annual capacity of 150,000 units.

The plant in Bangladesh will be the Indian company's first full-fledged manufacturing facility outside India, the company said.

'The commencement of our operations in Bangladesh is a significant milestone in our strategic global expansion plan. In addition to our first overseas joint venture, this is also where our first manufacturing plant outside India will come up,' said Pawan Munjal Managing Director and Chief Executive Officer.

He said the company is aiming for a market share of around 20 per cent in Bangladesh in the first year of its operation (2015-16).

“There will be a total equity injection of $12.6 million, in a ratio of 55:45, over two years. The new venture will have a capex of $23.2 million in the first year,” said Abdul Matlub Ahmad, Group Chairman, Nitol Niloy.

The Nitol Niloy group has interests in various sectors and also markets Tata Motors’ vehicles in Bangladesh.


HBL