JK Tyre Plans Latin American Production

JK Tyre is looking into the possibility of expanding its bias tyre production by making strategic share acquisitions in Latin America. “The demand for tyres, both in India and the international markets, is at a high. While we are expanding our production capacities in India, we also feel the need to source tyres from other markets to feed the growing demand,” said JK Tyre VC and MD Raghupati Singhania.

At the same time JK Industries’ Mysore plant rolled out its millionth truck radial, marking a milestone for the company. The one-millionth tyre was presented at a function at the former Vikrant Tyres Truck Radial Tyre Plant that was acquired by JK Industries in 1996. Speaking on the occasion, deputy chief minister Siddaramaiah said the government’s decision to divest its stake in Vikrant Tyres had been vindicated. He said the capacity of the plant had increased from 100 tonnes in 1996 to 213 tonnes a day at present.

The firm, has already identified targets in Latin America and SE Asia, and negotiations have been initiated for striking strategic alliances with these firms. Refusing to divulge details about the manufacturers, Singhania said: “We are just looking at expanding the bias tyre capacity by striking these alliances abroad.

Mr Siddaramaiah told the local Hindu newspaper that the State Industrial Policy 2001-2006 envisaged an annual economic growth rate of 8-9 per cent for the next decade, he added.

The vice-chairman and managing director of JK Industries, Raghupati Singhania, said the turnover of Vikrant Tyres had grown from 3.5 billion rupees (£45.68 million) in 1996 to 9 billion rupees (£117.4 million) in 2005. He refused to give details about speculation that the company was interested in acquiring Falcon Tyres.

Today, he said, the challenges of achieving radialisation of trucks were confronting the tyre industry. While passenger car segment had achieved radialisation of 90 per cent, the light commercial vehicle segment and heavy vehicle segment had achieved radialisation of 20 per cent and 2.5 per cent respectively.

Mr Singhania commented that he believes the import of second hand tyres should be banned as it posed not only risks to safety but also environmental hazards. Thirty-six countries had banned the import of used tyres and the central government must also do the same since the infrastructure improvement had resulted in an increase in the speed of vehicles.

Further, Mr Singhania alleged that the Chinese manufacturers were dumping tyres in India by under invoicing.

Mr Singhania also said the company was looking at outsourcing as an option and it included procurement of quality products to be sold under the JK brand. While the company already outsources tyres from China, he said, it was looking at outsourcing from Southeast Asia, South America and Central Asia as well.