Ashok Leyland (ALL) has said that it will set up an assembly plant in Kenya and Bangladesh soon. It has also decided to increase its Ras Al Khaimah (UAE) capacity to 6,000 units per annum to tap African and West Asia in a big way.
Gopal Mahadevan, chief financial officer, ALL said while Kenya assembly plant was for both trucks and buses, that of Bangladesh was mainly for trucks. “We will be investing $5 million in Kenya and the same amount will be invested by our franchisee in Bangladesh. Both plants will have an annual capacity of 3,000 units to be scaled up based on the demand.”
Mahadevan said Kenya was a key market for the company in the African region. The proposed assembly plant will also help ALL tap the neighbouring African countries, including Ivory Coast and Senegal.
The African region, which was earlier dominated by Chinese firms, has now opened up for Indian companies now. To prove it, the company recently bagged $100 million worth of orders from Ivory Coast and another $50 million worth of orders from Senegal. “Being the first mover into these markets, ALL will naturally set to benefit. The company can also offer products at competitive prices,” Mahadevan said.
“All these initiatives will make Ashok Leyland one of the top 10 truck makers in the world in next three to five years and exports will contribute 1/3rd to its overall turnover as against less than 1/4th,” he said.
“We expect to better the industry’s expected growth of 15% in current fiscal as we had done in Q1 with a 19% growth as against an industry growth of 15%. With the new emission Euro IV norms coming into place effective April 2017 and higher infra spend, we hope to post better growth,” he added.