The plant, which has a manufacturing capacity of 28,500 passenger car radial tyres per day and 2,500 motorcycle radial tyres per day, has seen an investment of Rs 1400 crore
RPG Group-controlled CEAT inaugurated its sixth tyre-manufacturing plant near Chennai to boost market share in the car and two-wheeler radials segment controlled tightly by market leader MRF.
The plant, which has a manufacturing capacity of 28,500 passenger car-radial tyres and 2,500 motorcycle-radial tyres per day, has seen an investment of Rs 1,400 crore in Phase 1. CEAT is presently the fourth-largest tyre-maker (in tonnage) in India.
The total outlay for future expansion, including the manufacture of other segments tyres like commercial vehicle and off-road tyres, can also be considered in later years, the company informed. CEAT has outlined an investment proposal of Rs 4,000 crore over a period of 10 years employing more than 1,000 people over the next few years.
Anant Goenka, Managing Director - CEAT, said, “We have a market share of 10 percent in passenger car tyres (PCR) and 28 percent share in two-wheeler tyres. We would like to improve our share in both the segments. PCRs are a very important segment and we would like to focus on expanding our growth in that segment.”
The Mumbai-based company has clocked a utilisation rate of 80 percent across its six plants. Goenka added that the radial tyre capacity was at high levels but the cheaper and outdated technology cross-ply tyres are running at low utilisation rates.
In a recent analyst call the company said that it spent Rs 1900 crore out of Rs 3,500 crore of total capex (capital expenditure). The overall capex guidance has been curtailed by Rs 500 crore to Rs 3,000 crore to be spent by FY22. The capex guidance for FY21 is Rs 800-1000 crore on standalone basis and for specialty business is yet to be figured out, CEAT's management said.
In the upcoming financial year, the company will spend about Rs 1,000 crore as capex. Its senior management has cautioned about a slowdown in off-take especially in supplies to vehicle manufacturers for at least two quarters of the new financial year.A major chunk of CEAT’s revenue comes from the after market segment which is around 60 percent while the balance is a mix of OE supplies and exports.
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