Commercial vehicle-maker Ashok Leyland Ltd. has drawn up plans to increase its share of revenue from exports almost fivefold in five years, said Chief Financial Officer Gopal Mahadevan.
He said the company plans to increase the share of export revenue from the present seven per cent reported in the first quarter of 2016-17 to between 30 per cent and 35 per cent in five years. To meet this goal, it had laid out plans to enter overseas markets and introduce new products resulting in improved margins.
Overseas presence“In Kenya, we are setting up an assembly line for bus and trucks to produce 3,000 to 5,000 units per annum. The investment will be $5 million and the plant will be ready in 8-12 months,” he said. The company plans to ship kits from India to assemble there. The plant expects to attract tax incentives, freight benefits, along with the advantage of localisation, he said.
Besides, Ashok Leyland will also enter Bangladesh with the help of a strategic partner for manufacturing trucks. The plant would be ready in 4-5 months. Ashok Leyland also proposes to expand its capacity at the Ras Al Khaimah unit in the U.A.E. from 4,000 to 6,000 units.
“The Kenya unit will give us access to East Africa, West Africa and adjacent markets. With this, we can expect the demand for our products to go up to 12,000 units,” according to him.
Revenue climbsFor the first quarter ended June 2016, the company posted a 10 per cent rise in revenues at Rs.4,259 crore against Rs.3,883 crore in the year-earlier period. Profit after tax grew 101 per cent to Rs.291 crore. Its debt came down to Rs.1,600 crore (Rs.3,600 crore). “Our domestic volume growth was 18.5 per cent against industry growth of 14.5 per cent.”
This is the ninth straight quarter in which we have grown higher than industry growth, he said.
