CEAT in expansion mode, investing Rs. 800 mln in next 12 mths
View(s):CEAT Sri Lanka will be investing Rs. 800 million in the next 12 months to expand its radial tyre manufacturing capacity to support growing local and export demand. ”We’re constantly on the look out to expand and this is also an effort towards that commitment,” Chanaka de Silva, Chairman CEAT told the Business Times. New machines are expected to be installed to produce 13 sizes of radial tyres which will result in increasing the production of existing sizes as well as adding new sizes, he said adding that this investment will increase the radial tyre production by 75 per cent from 40,000 to 70,000. Mr. de Silva expressed concern on the flooding of the market with imported tyres – especially from China. “Anti-dumping levies are now being imposed on Chinese origin Truck Tyre Imports to USA.
” He said that despite operating under stable raw material prices during the year, the same may not happen in the year 2016/17 as the company is already experiencing an increasing trend in raw material prices. This will be an additional challenge we will have to face along with stiff competition from imports.” Sri Lanka tyre manufacturers cater to 22 per cent of the global solid tyre demand, with many manufacturers producing specialised tyres to serve the growing technical requirements of the industrial world. Solid rubber tyres are used in forklifts and land mowers and industrial vehicles such as heavy trucks and trailers. Unlike pneumatic tyres, solid tyres are not filled with air and can endure high pressure and weight and are more durable to wear and tear.
Analysts said that since Sri Lanka is witnessing an increased number of Indian vehicle registrations during the past couple of years and as CEAT tyres are generally a preferred choice for Indian vehicles, volumes demanded in the future for the CEAT tyres is set to increase. A new production facility with an initial investment of Rs. 95 million for motor cycle tyres for the local and international markets was commissioned by the company in 2015 with an initial capacity of 162,000 annually in 17 sizes. The two wheel tyre segment accounts for the largest share in the overall domestic tyre market, which has seen the number of units increase from 1.9 million units in 2009 to 3.6 million units end of 2015.