ECONOMYNEXT - CEAT Sri Lanka has announced it will invest Rs 800 million over the next 12 months to increase radial tyre production capacity by 75 per cent, to 70,000 tyres a month from 40,000 to meet growing local and export demand.
The company said in a statement it currently has a 30% share of the radial tyre market and supplies nearly half of Sri Lanka’s overall requirement of pneumatic tyres.
About a third of CEAT Sri Lanka’s current tyre production is exported to 15 countries in South Asia, the Middle East, Africa and the Far East.
The new expansion comes two years after CEAT Sri Lanka commissioned a Rs 600 million radial tyre manufacturing plant at the company’s Kelaniya complex to produce tyres for cars and sports utility vehicles (SUVs).
“Our new investment entails a virtual replication of the plant we opened in July 2014, with new hi-tech machines,” CEAT Sri Lanka Managing Director Vijay Gambhire said.
“This bold decision to almost double production reflects our commitment to Sri Lanka and our confidence in the potential of our tyres to compete with global brands in the domestic and export markets. With this investment, CEAT Sri Lanka’s total investment will rise to Rs 3.8 billion.”
The new machines to be installed would produce 13 sizes of radial tyres, increasing production of several existing sizes as well as adding new sizes to the company’s radial tyre portfolio, which already comprises of 33 sizes - 20 for cars, eight for vans and five for SUVs, Gambhire said.
CEAT Sri Lanka Vice President Sales, Marketing & Exports Ravi Dadlani said the increase in production capacity and the introduction of new sizes will give the firm the potential to double market share.
Among the 13 CEAT radial tyre sizes to be manufactured when the latest phase of expansion is complete, are 31x10.5 R 15 All-Terrain tyres, 265/70R16 H/T, 205/75R 14 H/T and 205/75R15 H/Ttyres under CEAT’s Czar brand, and two export sizes - 215/70 R 15 C and 225/70 R 15 C.
(COLOMBO, May 31 2016)