The Honda Motor Company, Japan’s biggest motorcycle manufacturer, and the Bangladesh Steel and Engineering Corporation on Thursday signed an agreement to establish a joint venture in Bangladesh to assemble, and later manufacture, motorcycles by the end of this year.
The joint venture, Bangladesh Honda Private Ltd, will assemble 10,000 motorcycles in the first year, 35,000 in the second year and 70,000 in the third year, and then begin producing instead of merely assembling.
The chairman of BSEC, Ataur Rahman, and general manager of the Motorcycle Sales Division of Honda, Toshiyuki Inuma, signed the agreement for their respective sides in the presence of industries minister Dilip Barua.
For the next two years, the plant of the Bangladesh Honda Private Ltd will be set up in a rented plot at Sripur in Gazipur with a workforce of around a hundred.
Thereafter, the plant will be shifted to a suitable location owned by BSEC after completion of the necessary infrastructure development work.
‘Our target is to obtain an incorporation certificate and a trade licence by November and begin assembling by the end of the year,’ said Yoichi Mizutani, manager of the Motorcycle Sales Division of Honda.
The company will primarily assemble 100cc motorcycles to meet the domestic demand, he said.
According to Honda’s calculation, the sales of motorcycles in Bangladesh reached 1,80,000 units in 2011 with 11 per cent growth, and the steady growth of the market is expected to continue.
Yoichi, who is also expected to be the managing director of the proposed company, said that they have no plan to export motorcycles from the plant right now.
In reply to a question on when the plant will go into production, he said that Honda usually follows a policy of technology transfer and localisation of products produced in the local plant.
‘But Honda requires some conditions to be fulfilled before beginning production, such as enough space for the plant and an adequate number of suppliers,’ he said.
This initiative will follow the basic Honda policy of ‘Start small, grow big’, he said, and Bangladesh Honda will also grow big step by step.
The initial paid-up capital of the proposed company is Tk 61 crore, and Honda will own 70 per cent of the shares of the company and BSEC the rest.
The board of directors will consist of five directors. Among them, three will be nominated by Honda and two by BSEC.
The chairman of the company will be from the directors nominated by BSEC and the managing director will be from those nominated by Honda.
Industries ministry officials said that after successful completion of three years of assembling, the plant will go for production and manufacture 1,00,000 motorcycles per year.
After the new joint venture begins operation, the motorcycle production and wholesale functions of Atlas Bangladesh Ltd, a BSEC subsidiary currently responsible for the sale of Honda’s products in Bangladesh, will be transferred to the new company.
Industries secretary Mohammad Moinuddin Abdullah and additional secretary ABM Khorshed Alam, along with others, were present on the occasion.
-With New Age input