The new venture is the third major acquisition by the Pankaj-Munjal led Hero Cycles, part of the O.P. Munjal Group that is the highest producer of bicycles in the world, by volumes.
Now the company is aiming to tap the value market and would utilise its new acquisition to produce and sell niche bicycles in the developed world. BSH Ventures is a Sri Lanka-based export-oriented bicycle manufacturing company located in the Biyagama Export Zone.
Speaking with Business Today on the sidelines of the new acquisition in Colombo, Pankal Munjal said, "We have long been the highest volume churner, but now we are eyeing the high-margin, top-end market. We have acquired three companies in the past six months that would catapult Hero Cycles into the select league of global manufacturers with capabilities to produce products for trans-continental markets."
The world of bicycles is dominated by the Chinese players, which corner more than half of the $50-billion market and are marquee exporters to US and other major destinations. Indian companies, which together account for just 2.5 per cent of the global market in value terms, have been vying for a bigger share of the pie, but have not been able to crack these lucrative markets where normally technology-embedded bicycles are sold.
"We are working on new designs and lightweight metal alloys that would cater to the specialised UK and other European markets. We are toying with the idea to develop a design and innovation centre in Europe to supplement our efforts to develop and supply world class products from our Indian and the newly acquired Sri Lankan plant," Munjal added.
The company has picked up 60 per cent equity in BHS Ventures and would have an initial production capacity of 250,000 bicycles, which would be increased to a million per year by 2019.
Hero Cycles also unveiled its new brand Hero Sprint Pro, expanding its fitness and lifestyle segment with 17 new products in the category targeting youth and fitness enthusiasts. The manufacturing plant at BSH Ventures will be the manufacturing base for Hero Sprint Pro line of products.
Hero Sprint Pro boasts of a fully aluminium body with gears that make it a highly lightweight bicycling option, perfectly suitable for high impact outdoor fitness activities such as racing, adventure sports, mountain biking etc. The brand has been unveiled with 17 products to start with, in the price bracket of Rs 7,000 to Rs 15,000.