Hero MotoCorp has entered the Colombian market by forming a wholly-owned subsidiary in Colombia, named as “HMCL Colombia SAS”. The company has also laid the foundation stone for a manufacturing facility in the country.
The state-of-the-art manufacturing plant is spread over 17 acres of land at the Parque Sur Free Trade Zone at Villa Rica in the state of Cauca - about 500 km south-west of Bogota . This facility is expected to go full steam by the middle of calendar year 2015 with an initial installed capacity of 78,000 units. The production capacity will go up to around 150,000 units in the second phase.
This new facility will cost the Gurgaon-based manufacturer $70 million. HMCL will invest US$ 38 million in capital expenditures, 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 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. 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. Once operational towards the middle of Financial Year 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 US$70 million in the country. 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 & indirect employment, thereby contributing to the overall development of Colombia,” said Pawan Munjal, managing director & CEO, Hero MotoCorp.