Sri Lanka tyre plant by Ceylon Steel, Marangoni to sell old machines: report
Aug 22, 2016 15:01 PM GMT+0530 | 1 Comment(s)
ECONOMYNEXT - Marangoni, an Italy-based tyre maker, will not build a new factory in Sri Lanka as claimed in some reports, but is planning to sell old equipment in a closed plant to Ceylon Steel Corporation, which is based in the island, a media report said.
“The news in fact does not refer to the industrial tyre segment, but rather to a hypothetical transfer of technology to a Sri Lanka-based investor – Ceylon Steel Corporation – discussed as part of a possible joint venture in the passenger car tyre sector,” Tyrepress, a specialist publication, quoted the Italian firm as saying.
Marangoni stopped making passenger car tyres in Europe in 2014 and was in talks with Ceylon Steel to sell the old equipment to the company, the report said.
In May, a Sri Lankan government spokesman said the cabinet of ministers had approved a proposal by International Trade Minister Malik Samarawickrema to give 100 acres of land in Gonapola Horan to the factory, which will produce one million tyres per year.
It will sell at least 25 percent of the production in the domestic market.
The ousted Rajapaksa regime pushed up import taxes on tyres, giving excess profits to an Indian firm CEAT and its local partner Kelani Tyres.
Ceylon Steel itself is operating a near monopoly with protective tariffs, making housing more expensive for homeless Sri Lankans, despite collapsed world steel prices.
During the Rajapaksa regime, it was routine for Mercantilist businesses to lobby the rulers for import taxes to exploit domestic customers with high tariffs. The new administration is yet to take them off.
Tyrepress said Marangoni had set up its industrial tyre plant in Sri Lanka in 2008 with advanced technology. (Colombo/Aug22/2016)