The Hindu Business Line : Ceat plans Rs 500-cr radial tyre facility

New track
Land search narrowed to AP, Karnataka, Gujarat.
Plant to meet needs of passenger car, utility vehicles, LCV segments.
Radial technology available through Yokohama pact.

Pratim Ranjan Bose

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Kolkata, Feb. 28 Ceat Ltd has reportedly finalised plans to set up a 36-lakh radial tyre facility at an estimated cost of Rs 500 crore. Industry sources told Business Line that the proposed greenfield facility would primarily manufacture radial tyres for passenger car, utility vehicles and light commercial vehicles.

The project will also include a pilot plant for manufacturing 2.5 lakh truck-bus radials annually.

It would help the company establish its own technology, accessed through global consultants.

While the company is reportedly weeks away from finalising the location, for the moment the search for land has narrowed down to Andhra Pradesh, Karnataka and Gujarat. No suitable location was identified in Tamil Nadu — which also featured in the list of preferred destinations previously.

Hunt for tech partner

It may be mentioned that Ceat initially launched a hunt for the right partner having access to proven technology for setting up a commercial scale truck bus radial facility.

While the company did not rule out an equity joint venture for the same, it was firm on holding a controlling stake in the joint venture as well as adequate market access for its produce.

While Ceat sources maintain that the negotiations are still on, industry sources say that the foreign majors were hardly agreeable in giving Ceat access to proven technology on the said conditions.

The outcome was also not so unpredictable to Ceat.

As an alternative strategy, the company had appointed global consultants for helping develop a truck-bus radial technology of its own as well as improving its existing passenger car radial technology.

The existing radial technology was available to the company through its collaboration with Yokohama.

On its own

Having failed to find the right match so far, the RPG enterprises company therefore decided to go ahead on its own and develop truck-bus radial products through a pilot project (as was done by Apollo Tyres previously).

To make the entire project viable, stress was laid on manufacturing other proven products.

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