JK Tyre to invest Rs 1,100 cr for expansion

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New Delhi, July 24

JK Tyre and Industries Ltd (JKTI) is looking at investing Rs 1,100 crore in the next three years across its four plants to increase production capacities. Earlier, the company had planned to invest around Rs 600 crore in expanding capacities.

"Earlier we thought of investing close to Rs 600 crore but looking at the economic growth and with the boom in the Indian automobile industry, which is showing a ruboff effect on the tyre industry, JKTI is looking at investing Rs 1,100 crore, which will be raised through internal accruals and debts," said Mr Arun K. Bajoria, President JK Tyre and Industries Ltd. He added that the debt equity ratio could be 1:1.5.

Once the expansions are completed, JKTI expects its turnover to cross Rs 5,000 crore. The company closed the previous financial year (JKTI follows an October to September financial year) with a turnover of Rs 2,970 crore.

"We expect the turnover to be over Rs 5,000 crore by the end of the 2010 fiscal and by the end of the current fiscal, September 30, 2007, we expect the turnover to be close to Rs 3,500 crore. So, another Rs 500 crore every year is a very reasonable expectation," Mr Bajoria said.

Manufacturing Capacity

As per the expansion plan, JKTI hopes to increase passenger radials manufacturing capacity to seven million units per annum from the current 4.5 million units and is looking at almost doubling its bus-truck radial manufacturing capacity by 2010 from the current four lakh tyres a year. The company has already invested over Rs 300 crore in stabilising the quality of its truck-bus radials since 2002.

Taken from Business Line

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