Hero MotoCorp, on Monday, announced its entry into Colombia by commencing construction of its $70 million manufacturing facility in the South American country. The move is in line with the company’s vision of expanding its global footprint to as many as 50 countries by 2020.
“The commencement of our operations in Colombia is a definitive leap into the next level of our global foray…Today, we laid the foundation stone of our manufacturing plant at Villa Rica in Colombia, the first full-fledged plant by an Indian two-wheeler manufacturer in Latin America,” said Hero MotoCorp Managing Director and Chief Executive Officer Pawan Munjal.
Wholly-owned subsidiaryFor this foray, the company has formed a wholly-owned subsidiary named HMCL Colombia SAS. Hero MotoCorp would invest $70 million in the country through this subsidiary, it said.
“HMCL will invest $38 million in capex, with the rest being utilised as working capital over the next three-year period.
“The equity investment will be made through HMCL’s wholly-owned subsidiary in the Netherlands, HMCL BV,” the company explained.
Hero MotoCorp said the plant was expected to be operational towards the middle of 2015-16 financial year.
The plant will have an annual capacity of 78,000 units that will be scaled up to 1.50 lakh units in the next 3-4 years. The plant will be spread over 17 acres.
“With the setting up of the state-of-the-art world-class plant here, we will bring the latest modern technology into the country.
“As we grow our dealer network and localise our operations, we will generate immense direct and indirect employment, thereby contributing to the overall development of Colombia,” Mr. Munjal added.
