CEAT commissions new line at Chennai plant to produce truck, bus radial tyres

Chennai, Sep 11 (PTI) Tyre maker CEAT Ltd on Wednesday said it has commissioned a new line for rolling out truck and bus radials at its Chennai manufacturing plant.

The new line will progressively reach a production capacity of 1,500 tyres daily over the next 12 months and marks a significant milestone in the company's drive to expand its footprint in international markets, CEAT Ltd in a statement said.

The company already rolls out passenger car radial tyres and motorcycle radial tyres, it added.

The expansion ensures that CEAT Ltd is well-positioned to meet the growing demands of high-performance vehicles both in the domestic and international markets, the tyre maker said.

"The inauguration of the truck bus radial line at our export-centric Chennai plant is a key step in the company's global expansion strategy of offering a complete range of tyres across markets, including Europe and the US," CEAT Ltd Managing Director and CEO Arnab Banerjee said.

This investment reaffirms CEAT's dedication to delivering innovative solutions to customers worldwide, he added.

Briefing reporters, Banerjee said the company has earmarked Rs 670 crore for the facility located near Sriperumbudur that would produce truck bus radial tyres in addition to passenger car radials, and two-wheeler radials.

The manufacturing plant spread across 160 acres commenced operations in February 2020. About 50 per cent of employees hail from Tamil Nadu while remaining 50 per cent are from other parts of India.

With the latest investment of about Rs 670 crore, the total investments made by CEAT Ltd in Tamil Nadu factory would go up to Rs 2,970 crore as the company already invested Rs 2,300 crore at the plant, he said.

He said the company has plans to take the renewable energy contribution from the present 40 per cent to 50 per cent over the next 18 months.

Observing that the factory would predominantly be an 'export-oriented facility', he said, the focus would be on shipment would be to serve the United States and European markets.

Trucks, long-haul trucks, mining, buses, are some of the applications where the tyres produced from the Tamil Nadu factory would be used, Banerjee said.

Banerjee said the company holds market share of 8 per cent and they have planned to increase it to 12-13 per cent in the next two-three years.

"This is in the replacement market (market share of 8 per cent). We will have focused approach on increasing the market share to 12-13 per cent," he said.

Banerjee also pointed out that the company would be increasing its prices by 1-2 per cent to aid the increase in the cost of raw materials. There has been serious increase in raw material costs by 5 per cent in truck bus radial tyres and due to this the Q1 margin has dropped to 12 per cent from the earlier 14 per cent, he said.

"About 1-2 per cent price increase should happen. When it (the price increase) will happen, we do not know," he said.

Banerjee said the company was also mulling doubling of exports in the next two-three years. "We are also looking at South East Asia as Indonesia is one of the largest market for two-wheelers".

The capital expenditure for this year would be about Rs 1,000 crore and already Rs 670 crore has been invested at the Tamil Nadu factory, the remaining capital would be used to do some de-bottlenecking at existing facilities, he said. PTI VIJ MSS VIJ SS