The Telegraph
Tuesday , July 8 , 2014
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Hero plant in Colombia

Pawan Munjal in Villa Rica, Colombia, on Sunday. (Reuters)

New Delhi, July 7: Hero MotoCorp is setting up a manufacturing facility in Colombia as it seeks to expand to 50 countries by 2020.

The company, which has formed a wholly owned subsidiary in the country, plans to cater to the South American market through this plant.

“The commencement of our operations in Colombia is a definitive leap into the next level of our global foray,” Pawan Munjal, managing director and chief executive officer of Hero MotoCorp, said in a statement.

The total cost of the project is $70 million. Of this, Hero will invest $38 million in capital expenditure, with the rest being utilised as working capital over the next three years, the company said.

Spread over 17 acres, the manufacturing plant will come up at the Parque Sur Free Trade Zone at Villa Rica in the state of Cauca, which is about 500 km southwest of Bogota. It is expected to go on stream by the middle of calendar year 2015.

“Having already spread our footprint to 19 countries across Asia, Africa and South and Central America, the company is fast setting up a network of manufacturing units across continents to cater to existing and newer markets,” Munjal said.

“Once operational by the middle of 2015-16, the plant will have an annual capacity of 78,000 units that will be scaled up to 150,000 units in the next 3-4 years. Through our fully owned subsidiary in Colombia — HMCL Colombia SAS — we will be investing $70 million in the country,” Munjal said.

“The equity investment will be made through Hero MotoCorp’s wholly owned subsidiary in the Netherlands — HMCL BV. The plant, which is spread over 17 acres, will be the first manufacturing plant by any Indian two-wheeler maker in Latin America,” the company said.