Ceat Reiterates China Outsourcing Plans

Not wanting to miss out on a sizable chunk of India’s TBR sector, Ceat Ltd has decided upon plans that will see its sales increase from their current 600-700 tyres a month to 4,000-5,000 by June 2008. However to achieve this sixfold increase the Indian tyre manufacturer will need to outsource tyres from arch-rival producer China. India’s Hindu Business Line reported further news about the company’s plans on August 13.

“We have shortlisted a few Chinese producers and are currently evaluating the performance of these tyres. The evaluation process will be over shortly to make way for regular outsourcing,” a company official told the business daily. The tyres, unlike those sourced from Pirelli, will be marketed under brand names other than Ceat.

As previously reported by Tyres & Accessories, Ceat still hopes to enter into a technology sharing arrangement with an overseas tyre major, and while the Global top five manufacturers have not shown much interest in such a deal, a number of large tyremakers are still considered to be potential partners in a greenfield radial facility. However the company confirms it will proceed with this plant even without an overseas partner.

“We are committed to setting up a greenfield facility and will not wait forever for a tie-up. We will close the project latest by December. Once the plan is finalised, the plant will be set up in 18 months,” added the company official. If choosing this path Ceat would bring in consultants or advisors with the required radial technology knowledge.

The company believes the rate of TBR radialisation in India offers it the luxury of developing the technology in its own time if necessary. “We plan to set up one or two modules producing up to 20,000 tyres a month on a pilot basis and stabilise the technology in two years from setting up the factory,” said the Ceat official.