The Hindu Business Line : Ceat zeroes in on Patalganga for off-the-road unit

Plans ahead
Ceat may also relocate its Bhandup plant to Patalganga amid pollution concerns.
Capacity to be ramped up to 60 tonnes over next few months.

Pratim Ranjan Bose

Kolkata, Aug. 8 Ceat Ltd has decided to set up the proposed Rs 250-300 crore off-the-road (OTR) tyre unit at Patalganga in Maharashtra. The company may also relocate its facility at Bhandup in the suburbs of Mumbai to Patalganga in the future.

While land acquisition is yet to begin, company sources said that Patalganga emerged as a preferred location primarily because of its proximity to the port.

The proposed 60-tonne greenfield facility will produce high tonnage OTR tyres primarily to cater to the export market. “It will be India’s largest OTR facility,” a company official said.

Land plan

While the new facility may require up to 100 acres of land, the company may decide to acquire adequate land in Patalganga for possible relocation of the Bhandup facility, in the future.

The fast expansion of Mumbai city has led to concerns over industrial pollution at the Bhandup factory, which is located in the middle of a thickly populated residential area.

“Though there is no such immediate plan, the underlying situation may force us to consider relocation of the facility in the future,” the official said.

Capacity expansion

Meanwhile, Ceat has successfully ramped up the OTR capacity at both the Bhandup and Nasik factories from 30 tonnes to 45 tonnes, to be increased to 60 tonnes in next few months.

“We are expecting the ongoing capacity expansion drive (at the existing facilities) to impact our topline growth substantially in the third quarter,” the official said.

Reflecting on the performance of the company during the current quarter, he said, “Exports are following an uptrend. Domestic replacement sales are also steady. There is a drop on OE (original equipment) requirement from automakers compared to the second quarter of the last fiscal. However, compared to the first quarter of 2006-07, the OE market is slightly better.”