The Hindu Business Line : BEML makes triangular deal for off-the-road tyres

Bangalore April 2 A sourcing-cum-finance initiative involving BEML, fellow public entity Coal India Ltd and two leading tyre companies is setting off the indigenisation of some of the critical and heavier-range OTR tyres.

The `off-the-road' tyres are crucial for heavy-duty mining equipment and are imported. Now, there is a huge capacity crunch with international vendors.

BEML - which kits out its dumpers and mining equipment with these tyres and supplies the vehicles to end-users like CIL and coal companies - has roped in Apollo Tyres and JK Tyres into the 12-year triangular arrangement.

It will channelise loans of Rs 100 crore each from CIL to the domestic tyre companies to finance their facility expansion for OTRs. It will start buying these OTR tyres once the two majors are ready with them.

This will ensure timely delivery of OTRs for its trucks, at 25 per cent lower cost, according to BEML's CMD, Mr V.RS. Natarajan.

The coal companies totally need up to 10,000 OTR tyres for dumpers of varied capacities ranging from 35 tonnes to 120 tonnes. The initiative will initially focus on tyres for 60-tonne, 85-tonne, 100-tonne vehicles initially and move on to making OTR tyres of even 120-tonne, 150-tonne and 240-tonne calibre, BEML officials said.

Tyre manufacturers need 12-18 months to meet the demand and have been unable to keep the deliveries. Until three years ago, global OTR majors were queuing up, now they are not even looking at India because of the global demand spurred by a mining boom and good pricing, in particular from Australia and Brazil, they said. Nor were domestic manufacturers investing in OTRs.

The acute shortage building up in recent years had jolted the Union Coal Ministry as it threatened to hit coal mining output.

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