India's Hero buys Sri Lanka bicycle maker eyeing EU exports
Mar 23, 2016 07:05 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - India's Hero Cycles Ltd, has bought controls of BSH Ventures Ltd, a Sri Lanka based bicycle maker with Bangladeshi investments, a media report said.
"We have bought a 60 percent stake in BSH Ventures," Pankaj Munjal, Chairman of Hero Cycles was quoted as saying by Bike Europe in an online report.
"This move is to strengthen our efforts to emerge as a key bicycle exporting company to the high end EU markets from South Asia."
Hero wanted to export to the EU market through the Sri Lanka firm after the island regains GSP+ duty market entry.
Sri Lanka lost GSP+ when the last regime abused human rights of its citizens. There is a 14 percent tax advantage to export from Sri Lanka, the report said.
BSH Ventures Ltd, located in an export industry zone in Biyagama in Sri Lanka, employs 100 people and can produce 250,000 bicycles a year.
Hero wants to invest 15 million dollars to boost capacity to a million units a year.
It is licensed to produce Raleigh branded cycles.
The report said Bangladesh based Meghna Group, its Managing Director Mizanur Rahman and Jeyam Perumal of BSH Ventures holds the balance 40 percent stake.
Started in 1956, Hero Cycles is said to be the world's largest bicycle maker with an output of 5.5 million units in the 2015 giving it a 40 percent share of the Indian markets and capacity of 7.5 million units.