Hero Cycles Ltd, part of the O P Munjal group, today said it would start production at Bihta plant in Bihar from June to cater to different markets.
"We will manufacture one million bicycles per annum at our Bihta plant from June this year for which an initial investment of Rs 50 crore has been made," Hero Motors Ltd Managing Director Pankaj Munjal said today.
The company, which enjoys 70 per cent market share in Bihar, would employ about 650 employees, including those at ancillary units.
The production capacity would be increased later to feed the market in the North East, Munjal said.
Munjal thanked the Nitish Kumar government for its cooperation by which the company could begin manufacturing within a year of laying founding stone for the plant.
The company has a long-term plan to treble production of bicycles at three million units, he said.
Munjal advocated micro-financing mechanism for purchase of bicycles by the users in view of the utility being a prime mode of transportation in Bihar.
He asked the state government to waive the five per cent sales tax on bicycles so that large number of users could purchase cycles.
The state government might lose a small revenue of Rs 10 crore on account of waiver of sales tax, but it would have a positive bearing on the bicycle market on long-term basis, he said.