Ravi Dadlani, Managing Director/Chief Executive at CEAT Kelani Holdings, a joint venture with CEAT India and Kelani Tyres Plc, shares insights into success, their sharp customer-centric focus and the culture of continuous improvement that has helped the company establish market leadership in Sri Lanka and expand its exports market.
As the market leader in various categories of tyres, can you tell us how the company has evolved to where it is today?
CEAT as a brand has a heritage of nearly 100 years and over three decades of rich history in the domestic market as the brand was launched in Sri Lanka in 1992. Today, CEAT tyres are manufactured in Sri Lanka by a joint venture between CEAT India and Kelani Tyres. CEAT has been a dominant force in the local tyre market through continuous investments to increase production capacity and enhance the quality of the product.
CEAT has maintained market leadership in the country amidst intense competition from international and local brands. We have over 50% overall market share and over 80% market share in the truck and bus segment, 46% in the radial segment and 30% in the two-wheeler category. CEAT has been adjudged the most valuable brand in the tyre category for two consecutive years in 2021 and 2022 and ranks among the top 50 most valuable brands and top 10 strongest brands in the country as per Brand Finance rankings.
How important is it to be customer-centric? How have you built a culture of customer-centricity within CEAT?
Caring for our customers is at the core of who we are, and innovation plays a critical role for CEAT in continuously improving the product to meet the ever-evolving consumer needs and capture new opportunities that arise in the market. Over the years, CEAT has enriched its capability to understand the needs of various customers by building a peerless base of knowledge on terrains and vehicle dynamics across diverse sectors with the help of world-class technical support systems from our R&D teams in Europe and India.
Consumer needs differ in the commercial tyre and passenger vehicle tyre segments. However, we are mindful of the common expectations relevant to all tyre users like mileage, endurance, handling and safety features and reliability, which translates to minimal product failures. Comfort and appearance are critical factors in the passenger vehicle segment, while re-treadability is the core need of the commercial sector. Meeting these expectations is a continuous process involving investments in R&D and the latest tyre building technology, in improved compounds and in the development of newer tread patterns.
We are also continuously investing in machinery to increase the range of sizes we manufacture, especially in passenger car radials. The state-of-the-art research and development centre and testing facilities, high standard of manufacturing facilities and high level of testing protocols ensure consistent and high standard product quality that makes mobility safer and smarter every day.
Can you discuss the JV with CEAT India and what that means for future growth?
We are one of the most successful Sri Lanka-India joint ventures. We enjoy the best of both worlds. We have the technology, R&D support, and strength of the tyre industry from CEAT India together with the expertise in managing large markets, investments, focus and access to the latest equipment. These are the strengths we derive from CEAT India. The advantage of the local company is in terms of the diverse knowledge of the Sri Lankan market, local expertise, and managing policy and local industry. Having two diverse owners willing to meet on the same platform for the benefit of taking the company and industry forward is the secret of our success.
You invested in revamping specific tyre categories and sizes and expanding production capacity to meet market demand. How is this progressing? Any plans to expand your reach here and overseas?
We had to invest substantially to increase our production capacity to cater to the increased demand in the local market due to prevailing conditions. We implemented a series of capacity enhancement activities in our radial and motorcycle categories in 2019 and 2020 and allocated an additional investment of Rs 3.2 billion in 2022 to expand volumes and for technology upgrades and new product development. Our manufacturing operations in Sri Lanka encompass tyres in the radial category like passenger cars, vans and SUVs, the commercial category including nylon and radial, and tyres for the motorcycle, three-wheeler, and agricultural vehicle segments.
In addition to supplying the market-leading share of domestic tyre requirements, CEAT has continued to support the national economy through import substitution by meeting over 50% of the Sri Lankan tyre requirement domestically. CEAT tyres are internationally recognized for their quality and are exported to about 15 countries worldwide under private brand names.
CEAT’s long-standing reputation for high quality and reliability is the core value proposition attracting a loyal international customer base that has been with the company for almost 20 years. We export tyres from Sri Lanka to Egypt and Pakistan under the CEAT brand and use other brands like Orion and Kelsey for tyre exports to other destinations. These destinations include but are not limited to the Philippines, Pakistan, India, Yemen, Chile, Indonesia, Mauritius, Singapore, Jordan, Ghana, Syria, Nepal, Seychelles, Egypt, and Afghanistan.