‘Look North-East’ push from govt, tyre sector gathers pace

OUR BUREAU Chennai | Updated on January 09, 2018

Satish Sharma (right), Chairman, Automotive Tyre Manufacturers Association, and Kaushik Dutta, Director, Thought Arbitrage Research Institute, at a press conference in Chennai - Photo: Bijoy Ghosh

Freight cost major issue for the industry

Efforts to develop rubber industry in the North-East to meet the shortfall in natural rubber for tyre production are gaining momentum, according to Satish Sharma, Chairman, Automotive Tyre Manufacturers’ Association (ATMA).

“At least two leading tyre companies have started sourcing natural rubber from the North-East. We have also recommended some specific points to the government to improve the ecosystem jointly,” he said here.

Improvement in law and order situation, Centre’s strong Look-East focus and better infrastructure are also positives. Many rubber growers from Kerala are also going to N-E to set up shop there.

The government also expects the tyre industry to put some processing centres, he said.

However, freight cost is a major issue for the tyre industry. A transport subsidy policy for the N-E from the government is on the cards to resolve some key issues. This will be a major trigger for the tyre makers. There is a 30 per cent shortfall in rubber production to meet the tyre industry’s needs. N-E has the potential to produce 4 lakh tonnes, but producing just 80,000 tonnes, said Rajiv Budhraja, Director-General, ATMA.

Doubling exports

Sharma said the tyre industry had favourable assurance from the Union Minister of Commerce and Industry Suresh Prabhu when it presented the case for doubling current tyre exports of $1.2 billion in three-four years.

ATMA will soon submit a report to the government seeking some policy support to boost exports.

Sharma also pointed out that the tyre industry benefitted from demonetisation, anti-dumping duty and GST. The Chinese tyre imports fell to about 60,000 a month from about 150,000 units in May 2016. “Traders are aligned with the formal system now,” he added.

Double-digit growth

The tyre industry expects the second-half of this fiscal to be better than the first-half with overall growth in high single digit. 2018-19 will be a strong year with double-digit growth due to favourable demand.

Published on November 26, 2017

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