Hero MotoCorp lays foundation stone for new plant in Colombia

Hero MotoCorp has marked its entry in the Colombian market with the setting up of a fully owned subsidiary, HMCL Colombia SAS. Construction has commenced at the plant at Villa Rica, Cauca, with the facility slated to be operational by mid-2015. Initial manufacturing capacity will be 78,000 units per annum, going up to 150,000 units in phase 2. Project cost is estimated at US$ 70 million (Rs 418 crore) with $ 38 million (Rs 227 crore) in capex and the rest as working capital over the next three years. The equity investment is through HMCL BV, a wholly-owned subsidiary in the Netherlands.

According to Pawan Munjal, MD and CEO, Hero MotoCorp, who laid the foundation stone for the new plant yesterday, “The commencement of our operations in Colombia is a definitive leap into the next level of our global foray. Having already spread our footprint to 19 countries across Asia, Africa and South and Central America, we are fast setting up a network of manufacturing facilities across continents to cater to the existing and newer markets. Our manufacturing plant at Villa Rica in Colombia will be the first full-fledged plant by an Indian two-wheeler manufacturer in Latin America.”

The Colombian foray is in line with the two-wheeler manufacturer’s aggressive game-plan of expanding its global footprint to as many as 50 countries by 2020.

Since 2011, following the split with partner Honda Motor Corporation, Hero MotoCorp has speedily grown its global presence. At present, its products sell in 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 its local distributors, the company has set up assembly units in Kenya, Tanzania and Uganda in East Africa. The latest in this programme are the one in Colombia, and the other in Bangladesh.

Hero MotoCorp, which sold a record 6.25 million two-wheelers in 2013-14, aims to cross 100 million units in cumulative production, and annual bike and scooter sales of 12 million units by the year 2020. It also plans to have more than 20 manufacturing and assembly plants across the globe with sales in more than 50 countries by that year.

Photograph: Hero MotoCorp’s Pawan Munjal with  Temistocles Ortega, governor of the state of Cauca, at the commencement of construction at Hero’s new plant in Colombia.