Business

Business

When the going gets tough CEAT gets going
By Akhry Ameer
Our vehicles have them all the time and we move from place to place taking them for granted, and we only think of them when they are wasted and a new set is required.

Some of the female workers who have been recruited on a trial basis in a predominantly male-dominated workforce at work. Pix by J. Weerasekara

But even then, to the ordinary man it is still 'rubber'. Little do we realise that to make this circular piece of 'rubber', 15 different raw materials are required on an average. Tour a factory and for a good part of it you will not see this circular object, as the Sunday Times Business recently discovered when it visited one of Sri Lanka's premier tyre manufacturing plants, the CEAT-Kelani Associated Holdings (Pvt) Ltd (CKAH) tyre factory at Kelaniya, the makers of CEAT tyres, formerly known as Kelani Tyres.

While touring the CKAH facility at Kelaniya, we are hold of processes like compounding, drying, extending, heating, cooling, cutting, etc. and yet we see no sign of a tyre. This is due to the fact that the various raw materials have to be prepared into components before the actual tyre making process begins. Most of these components once prepared are assembled together at the stage of beading when you actually begin to see the circular shape. The beading process brings together the plies of rubber, the bead wire that forms the part of the stiff edge that sets into the steel rims of vehicles and various other components to be moulded into a bald, rounded shape known as the 'green tyre'.

Workers trimming the bristle-like-rubber after vulcanising in the finished goods area.

The green tyre is vulcanised to make the actual tyre we use in vehicles. The process does not end with vulcanising as it is then sent through the finished goods section where the bristle-like rubber surrounding the surface is trimmed and each tyre is balanced. Finally each and every tyre is carefully scrutinised before it is released to the market.

One of the unique features of the factory is its illumination, where most of the time energy on lighting is conserved by using glass panels on the roof to enable rays of sunlight to penetrate the premises and provide internal lighting. Though established in 1963 the factory's layout has been designed in such a manner that each process feeds its output into the next through conveyor belts and suspended rails.

It is a facility that can produce tyres in excess of the Sri Lankan market requirements. However, this position was never achieved when it operated as Kelani Tyres. The company became a joint venture in 1993 when CEAT of India together with Associated Motorways and the National Development Bank invested in the organisation that is now known as CEAT-Kelani Associated Holdings. CEAT with a 30 percent stake has total management control and is the technology supplier.

"The company is at the right stage to grow." says Ramesh Ramanathan, the Managing Director and Chief Executive Officer, confidently despite having taken up the position only four months ago. His reasons being the local availability of rubber, raw material at low rates of duty, availability of a skilled labour force and the fact that the Kelani plant has been built to produce as much as 90 tonnes per day. Currently the plant manufactures 20 tonnes per day. The productivity or output of tyres is measured in tonnage owing to the various sizes that take different durations for production. The company now produces 57 different sizes of tyres of which production can carry out any fifteen sizes on a given day.

Explaining the low production, Ramanathan said they have been improving the processes and are currently averaging 850 tonnes per month as opposed to 500-600 tonnes six months ago. He added that they hope to achieve a target of 1,000 tonnes per month by September this year. This is expected to double the turnover of last year and hit the Rs. 2 billion mark.

He added that at the maximum output level CKAH would be able to export around 900 tonnes after meeting the local demand. At present CKAH is exporting to countries like Singapore, the Philippines, Dubai, Uganda and South America. CKAH has also started to export raw materials with its first shipment to CEAT in India recently. The company's main aim is to achieve dominance in the local market for conventional tyres. CKAH hopes to reach this target through a strong focus on the trucks segment.

Asked as to how the company can achieve this maximum output, Ramanathan said that some machinery had been out of order and they are now in the process of repairing them. Thereafter new machinery will replace the ones that are beyond repair. Plans are underway to obtain new machinery to increase output in the vulcanising process. Since the establishment of the joint venture CEAT has introduced new machinery including a plant to manufacture bladders. The bladders, which are a kind of rubber, were earlier imported at high cost. The bladder is a material that is used to hold the tyre during the vulcanising process and does not form part of the actual tyre.

CKAH also has a factory in Kalutara that mostly manufactures tyres for trishaws. The company has a workforce of 700 employees including the management. About two months ago the company recruited its first batch of female workers on a trial basis. Formerly the workforce comprised only males. When asked about the management-employee relationship, Ramanathan said they are "all on one side to make things happen" and have signed a long-term settlement with "protectivity" (safeguards against industrial action) norms.

CKAH functions as an independent entity in Sri Lanka and draws from CEAT in India technological expertise and other support where necessary. A recent development was the energy audit of the local facility carried out by two officials from its Bombay office to explore areas of improvement.

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