JK Tyre enters Tamil Nadu with Rs.1500 crore plant

August 4th, 2010 - 8:51 pm ICT by IANS  

Chennai, Aug 4 (IANS) JK Tyre and Industries plans to beef up its topline adding Rs.2,000 crore with a new radial tyre plant in Sriperumbudur near here from fiscal 2012-13 onwards, said a top company official.
“The new plant is expected to add Rs.2,000 crore to our turnover. The plant will roll out its first tyre sometime next October. By then the total production capacity for the company will be 1.55 crore tyres,” Managing Director Raghupati Singhania told reporters here.

The company signed a memorandum of understanding (MoU) with the Tamil Nadu government Wednesday for setting up the plant that is expected to generate around 1,000 direct jobs.

According to Singhania, the 100 acre Sriperumbudur plant would save the company freight cost - tyres and raw material cartage- as all these years JK Tyres catered to the southern market from its plants located in Karnataka and other parts of India.

He said the new plant will not majorly alter the company’s sales to vehicle manufacturers and retail/replacement market.

“In the car and trucks segment our sales to original equipment manufacturers (OEM) is 55 percent and 14 percent respectively. The new plant may not alter this ratio,” Singhania said.

He said a minor portion of the production from the proposed plant will be exported.

He said the company has been expanding capacity in the recent years at an outlay of Rs.500 crore.

“We have signed up a supply agreement with Bharat Earth Movers Ltd to supply tyres for their earthmoving equipments. We will shortly roll out tyres weighing 3.7 tonne and 12 feet in diametre from our Mysore plant.”

JK Tyre invested around Rs.130 crore in expanding the earthmoving equipment tyre capacity. The company has a capacity to roll out 50,000 tyres for this vehicle segment.

Asked about the company’s plans to get into making two wheeler tyres, he said: “Every six months we get the urge to reenter that segment looking at the industry numbers. However, we are yet to take a firm decision. Long back we were making two wheeler tyres but decided to focus on four wheeler segment.”

Refuting that there is a shortage of truck tyres in the country, he said: “The truck companies are saying that as they are unwilling to accept the increased price.”

He said buyers of trucks fitted with Chinese tyres are now demanding further discounts from the vehicle makers.

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