Ashok Leyland to set up plants in Kenya, Bangladesh


Chennai: Hinduja Group flagship company Ashok Leyland has firmed up its plans to strengthen overseas presence as part of its vision to garner one-third of revenues from exports.

The city-based heavy commercial vehicles maker is setting up an assembly facility in Kenya, another one in Bangladesh through a partner and also expanding its UAE unit, Ashok Leyland chief financial officer Gopal Mahadevan said.

“We have firmed up our plans to set up assembly plant in Kenya. We are going to invest there. We will start with 3,000 units (in terms of plant capacity). Investments, it is not going to take more than $5 million,” he told reporters.

Stating that the exports were tad low in first quarter, he said, “it is only seven percent (revenues from overseas in April-June 2016 quarter). We expect to catch up in second and third quarters”.

To a query, Mahadevan said, the Kenya plant would be ready in eight to 12 months. While the Kenya plant would assemble both buses and trucks, he said, the Bangladesh plant was to assemble trucks.

“Our strategic (JV) partner will invest in Bangladesh unit. It should be ready in next four to five months”, he said.

On the Ras Al Khaimah unit in United Arab Emirates, he said, the company was looking at expanding up the facility to 6,000 units. “Our capacity expansion in there has been happening. It has gone up from 2,000 units to 4,000 units. Now we are looking at increasing it to 6,000 units per annum”, he said.

He said Ashok Leyland’s focus in Africa would continue. “we have order from Ivory Coast which we have to execute this year. Our share of revenue from exports actually start going up”, he said.

“On the medium term we are looking at one-third or one-fourth of revenues coming from exports in next five years”, he said.

Earlier commenting about the performance for the first quarter 2016, he said, the domestic sales volume grew by 18.5% to 22,961 units in both trucks and buses segments.

“Our growth has been 18.5% against industry growth of 14.5%. Our over all revenue has grown up by 10% and EBITDA margin for the quarter ending June 30, 2016 has been higher at 11.2%,” he said.

“Our profit after tax including exceptional item has grown at 101% and our debt equity ratio is very low at 0.3:1%,” he said.