Ceat Sri Lanka to Make Most of Lower Rubber Prices

Ceat Sri Lanka, the joint venture company established by Ceat India, Associated Motor Ways and Kelani Tyres, will take advantage of declining world rubber prices to strengthen its position in the local car and truck tyre market. The company’s managing director, Rohan Fernando, said that “the global financial crisis has reduced global tyre consumption. Therefore, international rubber prices have also come down in view of the current financial crisis during the last few months.” With cheaper prices for the material that accounts for 40 per cent of a tyre’s construction, Ceat’s production costs are expected to drop.

Fernando commented that the global recession has been softening tyre markets, especially in the USA. However, he said this scenario is an opportunity for the company, as it could pass the benefit to consumers. The company currently holds around 60 per cent of Sri Lanka’s truck tyre market and 12 per cent of the passenger car market. According to Fernando, the company is planning to consolidate in the local radial tyre market, a segment in which it must compete with more than 20 importers. Therefore, with lower rubber prices it will be able to capitalise on the business in the future.