DHAKA (Reuters) - Hero Motor Corp Limited (HROM.NS), maker of the Hero motorcycle, will invest $40 million in a new manufacturing plant in Bangladesh in its first overseas joint venture, Pawan Munjal, the company’s managing director and chief executive said.
The company signed an agreement on Monday with local automobile company Nitol Niloy Group to start work on the project which will be Hero’s first manufacturing plant outside India.
Hero will hold 55 percent in the new joint venture while Nitol will hold 45 percent.
Pawan said that once operational by the second quarter of financial year 2015-16, the plant would have an annual capacity of 150,000 units. He said the aim was for around a 20 percent share of the market in Bangladesh.
Abdul Matlub Ahmad, chairman of Nitol Niloy Group said the joint venture aimed to provide technologically-advanced and fuel-efficient motorcycles for customers in Bangladesh. He told Reuters that the plant would create up to 200,000 (direct and indirect) job opportunities in the country.
Matlub said that Bangladesh’s annual motorcycle sales might hit around 1.4 million units in the near future from around 500,000 units at present.
Hero motorcycles account for 50 percent of the total motorcycle market in India, Matlub said.
Reporting By Serajul Quadir. Editing by Jane Merriman