Agarwal Rubber takes up Rs 225 crore brownfield expansion project

Agarwal Rubber Limited, a manufacturer of automobile tyres and Butyl tubes, has taken up a Rs 225 crore expansion project which will enable it to double the existing capacity of 70 tonnes per day.

Founded in 1986, the Hyderabad-based company, which has three manufacturing facilities at Patancheru, Bollarum and Sadasivpet, all in Telangana, has commenced work on the expansion project and expects it to be ready by April 2020.

Amit Kumar Agarwal, Chairman and Managing Director of Agarwal Rubber, said that the expansion project is being taken up on a 40 acre site adjacent the existing factory. It is now underway at Sadasivpet, about 70 km from Hyderabad. This will enhance the company manufacturing capacity from 70 tonnes per day significantly as we take up phase I and Phase II projects.

“In the first phase, where Rs 225 crore is being invested, the capacity will go up to 150 tonnes per day with capability to double this in the next phase,” he told Business Line.

Over the years, the company, which started its business manufacturing tubes, had diversified and added tyres. Now, it serves several segments within the tubes and tyres business and employs over 1700 people. This includes off-road products, aircraft, both civilian and defence and some special category construction equipment vehicles.

“Of the Rs 300 crore turnover, exports account for about 50 per cent of the total business. If we expand the manufacturing facility, we will be better placed to serve our growing export business. The existing capacity is functioning at 95 per cent capacity necessitating expansion,” he said.

For the company, the after-market is a big business as it serves motorcycles, mopeds and scooters, three wheelers, ultra light trucks, LCVs among others. Apart from this, it also manufactures import substitute special tubes for aircraft and various defence requirements, he added.

Apart from existing range, the new facility will enable the company to manufacture tubes and tyres for off the road vehicles, agriculture equipment and radial tyres for motorcycles.