The Hindu Business Line : Ceat to firm up plans on radial facility location, tech partner this month

“We will firm up plans on the technology partner as well as the location of the proposed truck-bus radial facility in February,” the Managing Director, Mr Paras Chowdhury, told Business Line. Ceat has already identified Andhra Pradesh, Tamil Nadu, Gujarat and Karnataka as the possible locations.

Mr Chowdhury maintains that the company has options in the form of in-house technology solutions offered by a consulting group or a foreign partner. The partner may either restrict itself as a technology partner or enter into an equity joint venture with Ceat.

Uncertainty

Sources, however, told Business Line that the company is in advanced stage of negotiation with foreign tyre companies for setting up the facility through joint venture route. There is uncertainty as Ceat wants the majority stake in the joint venture.

Considering Ceat’s focus on exports, the company has also demanded wider market access for the venture.

“If the plant is set up with technology support from the consulting group, we will be holding a clear 100 per cent in the radial facility. However, in case of an equity venture we may be holding controlling stake,” Mr Chowdhury said. “The options are wide open on both the counts,” he added.

Price hike

Meanwhile, Ceat has effected 1.5 to 5 per cent price increase on agricultural tyres (tractor and tractor trolley) and car tyres, including the utility vehicles segment, on February 1.

“We have decided to increase the price of truck-bus tyres by 2-2.5 per cent next week. The two to three wheeler tyre prices will be increased by 2.5 to 3 per cent on February 15,” Mr Chowdhury said.

Overall, Ceat tyres will be costlier by 2.25 to 2.5 per cent by the end of the next week. JK Tyre and Apollo have also started increasing tyre prices.

Mr Chowdhury said that Ceat has been witnessing higher OE demand from HCV and MCV segment during January and February compared to April-December 2007 period. Overall the company is confident to post 20 per cent value growth on sales during this fiscal.

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