Hero Cycles, the world’s largest bicycle manufacturer, has acquired majority stake in one of Sri lanka’s leading bicycle manufacturers BSH Ventures for an undisclosed sum, strengthening the company’s manufacturing presence in the Indian subcontinent. This is the third major acquisition within six months
The acquisition comes in line with the company’s aggressive intent to strength its global presence and to spruce up its manufacturing proficiency to feed a rapidly rising global demand.
The acquiring of 60 per cent stake in BSH Ventures comes within months of the company making significant acquisitions in UK-based Avocet Sports and Firefox Bikes. While Avocet Sports was Hero Cycles’ first overseas acquisition and marked the company’s entry into mass segment of European bicycle market, the acquisition of Firefox Bikes was a strategic move to cement its position in the fast-growing premium bicycling segment in India.
BSH Ventures is a Sri lanka based export-oriented bicycle manufacturing company located in the Biyagama Export Zone in Sri lanka. With an acquisition of a 60 percent stake in the company has enabled Hero Cycles to actively build this facility as a key hub for manufacturing its premium bicycles to meet the global demand, double up exports to Avocet and simultaneously feed the ever growing demand for premium bicycles to the South Indian market, given its geographical proximity to Sri lanka.
“This is a major strategic acquisition for us as we work to expand our presence globally – both in terms of sales as well as presence. Hero will further invest into ramping up the plant capacity in Sri lanka to half a million units per year with clear plans laid out to fuel the domestic as well as ever growing global demand,” opined Hero Cycles Chairman & Managing Director Pankaj Munjal.
This key acquisition will help Hero Cycles to increase its share in the international sales of Indian bicycles companies to close to 30 per cent.
Hero Cycles has been aggressively driving growth by clocking a robust 11 per cent growth in the Indian market. With the acquisition of ‘Firefox Bikes’ Hero Cycles now also commands dominance in the double-digit growing premium segment and continues to maintain its dominance in the mass segment with over 45% share.
Incorporated in 1956, Hero Cycles limited is the largest bicycle manufacturer by volume in the world. The company has a manufacturing capacity of 7.5 million bicycles per year, with its units in ludhiana (Punjab), Bihta (Bihar) & Ghaziabad (UP). It has a highly integrated plant in ludhiana which produces 19,000 bicycles every day. It also manufactures automotive rims and various other precision-engineered auto components.
Hero Cycles posted a turnover of around Rs3000 crores during the financial year 2014-15 with a production of around 5.5 million cycles. It is the leader in both the standard and specialist bicycle segments in India, with an overall market share of about 41 per cent. Hero Cycles has been aggressively driving growth by clocking a robust 11% growth in the Indian market.
With its recent announcement of entry in the European market and acquisition of Firefox in India and Avocet Sports in UK, Hero Cycles aims to grow by Rs8000 crore by 2018.