TI Cycles Takes Over Two Sri Lankan Bike Companies
COLOMBO, Sri Lanka – Sri Lanka is fast emerging as favourite hunting ground for Indian bicycle producers as they are acquiring companies in the neighbouring island nation. TI Cycles of India is the latest which acquired controlling stakes in two Sri Lanka based bicycle makers; Creative Cycles Ltd. and Great Cycles Ltd. Both companies are based on the outskirts of Sri Lanka’s Capital Colombo.
TI Cycles (subsidiary of the USD 4.7 billion Murugappa Group) has signed a definitive agreement for the acquisition of majority shareholdings in both Lankan firms. According to the filing with the Bombay Stock Exchange (BSE), Tube Investments of India Ltd. (of which TI Cycles is a division) confirmed that it had entered into separate shareholders’ agreements with Shuyuan Gan, 100% shareholder of Great Cycles and Creative Cycles.
Tube Investments of India Ltd. acquired 80% of the issued and subscribed share capital of each of the two companies for an aggregate amount of USD 3.34 million.
Expansion of TI Cycles’ premium bikes portfolio
This acquisition is to be concluded by the end of the 2017 fiscal year which is in March next year. “It will help strengthen and expand the global supply chain for the premium bikes portfolio of TI Cycles,” said TI Cycles on questions by Bike Europe.
Creative Cycles and Great Cycles have manufacturing facilities in the Katunayake Export Processing Zone of Colombo. The companies produce a full range; from kids to performance bikes with steel to alloy frames.
“With this acquisition, we will be able to grow our market share in the premium segment even more aggressively,” said L Ramkumar, MD, Tube Investments India Ltd.
Shuyuan Gan, Founder & Director of Creative Cycles & Great Cycles said, “We’re looking forward to working closely with TI Cycles as an integral part of their global supply chain.”
GSP+ import duty free status
The take-over of the two Sri Lanka bike makers is in line with TI’s strategy of actively exporting to the EU markets. For that Sri Lanka based companies have with their GSP+ import duty free status for the EU import of their products a USP compared to other makers. Also the proximity of the two Lankan bike making companies to the Colombo port is reducing lead times for shipments to Europe.
Creative Cycles was founded in 2004 for taking advantage of the Sri Lanka’s duty free status. The export oriented unit has the capacity to produce 200,000-300,000 bicycles annually
Great Cycles is a sister company of Creative Cycles, which bought was bought in 2005 and started manufacturing frames and forks in 2006 for achieving the 70% GSP local content rule.
Indian bicycle major, Hero Cycles Ltd moved into Sri Lanka with the take-over of BSH Venture Ltd in 2016.