File photo of Martin Schwartz, chief executive officer of Dorel Industries.Christinne Muschi/Reuters
Dorel Industries Inc. plans to assemble some of its bikes in Brazil at a factory owned by Caloi, a major South American bicycle manufacturer that will be majority-owned by the Montreal-based consumer products company.
A Caloi factory in northern Brazil will assemble Dorel's Cannondale, Schwinn, Mongoose and GT bike brands for the Brazilian and export markets.
Caloi's manufacturing plant in Manaus produces more than 700,000 bikes a year and is the largest bicycle factor outside Southeast Asia.
Caloi employs 900 people at various locations, including the Manaus plant, its head office in Sao Paulo and a technology and logistics centre in Atibaia.
Dorel says its acquisition of a 70 per cent ownership stake in Caloi wil will immediately boost its profits and push its annual bike revenues above US$1 billion.
Caloi's sales in 2012 were US$111.6 million, a 22 per cent increase from the previous year.
Dorel says Caloi is Latin America's largest bicycle brand and has an estimated market share in Brazil of more than 40 per cent.
The acquisition increases Dorel's presence in South America, a region it has targeted for growth. Dorel established a juvenile products division in Brazil in 2009 for its line of children's car seats.
It's also partners in a line of retail stores in Peru and Chile that helped grow Dorel's sales in Latin America by 35 per cent last quarter.
Dorel manufacturers a number of children's products under the Safety 1st, Quinny, Cosco, Maxi-Cosi and Bebe Confort brands, while its bikes and related products include brands such as Cannondale, Schwinn, GT, Mongoose, IronHorse and Sugoi. It has annual sales of $2.5 billion (U.S.) and employs 5,400 people in facilities located in 24 four countries.