JK Tyre looking to export regionally from new plant
Commercial production got underway at JK Tyre & Industries’ new plant in Chennai, India on 5 February. The company announced the facility’s entry into service at a press conference in Chennai the following day.
“We have positioned to take on the competition well,” stated Raghupathi Singhania, vice-chairman and managing director of JK Tyres. The plant, which was set up at a cost of Rs 9.7 billion (£124.5 million), has a capacity of 2.5 million passenger car radials and 400,000 truck and bus radials per annum – giving the company a total capacity of 7.5 million passenger car radials and 1.4 million bus and truck radials.
“We have also added two lakh (200,000 units) capacity at our existing Mysore plant to take its total capacity to ten lakh (1,000,000) tyres per annum,” Singhania shared. “The company invested another Rs 130 crore (£16.7 million) into the Mysore (Karnataka state) plant. It is significant to note that we could commence the Chennai plant in a span of 17 months.”
As Tyrepress.com reported yesterday, the Chennai factory will cater to a number of OEM customers. In addition to Daimler Benz, Singhania said “the Chennai plant will cater to both domestic and exports and particularly meet the demand from local players such as Hyundai, Ford and other players.” He added that the Indian automotive market is expected to revive in the next financial year and thus JK Tyre hopes the tyre industry will post moderate growth, including a sharp pick up from the replacement market.
The vice-chairman and managing director said the Chennai plant will export products to SAARC (South Asian Association for Regional Cooperation) countries – an export market that potentially includes Sri Lanka, Bhutan, the Maldives, Nepal, Pakistan, and Bangladesh and Afghanistan – and will gain further capacity at a later date through further expansion. The facility is the company’s sixth in India.
Singhania also confirmed that JK Tyre wishes to invest in securing a portion of its raw material requirements. “We are still looking for acquiring natural rubber plants abroad,” he said. “We are looking at countries like Thailand, Malaysia, Cambodia among other producing countries. However the acquisition will not meet our entire demand.” He opined that India’s government should “identify more areas apart from north Karnataka and north-eastern states like Tripura to produce more natural rubber and should offer more incentives.”
A further topic broached at the 6 February press conference was the impact of cheap imported tyres and the response local manufacturers desire. “The government should increase the anti-dumping duty on Chinese and Thai tyres, which alone account for 40 per cent of the total passenger car replacement tyre market in India,” Singhania stated. “We want a level playing field by fixing a fair price formula for imported tyres. We hope the government will look into the matter seriously.”
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