The Hindu : Business : Ceat to set up two greenfield facilities

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Wednesday, Apr 16, 2008
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Ceat to set up two greenfield facilities

Special Correspondent

MUMBAI: Ceat, the leading tyre maker, which is in the midst of its golden jubilee year, has proposed an investment of up to Rs. 1,000 crore in setting up two greenfield facilities. The flagship of RPG Enterprises, Ceat has an annual turnover of Rs. 2,500 crore and makes around 10 million tyres annually from plants in Mumbai and Nashik.

The additional facilities will raise the capacity to 15 million tyres.

New logo

Addressing a press conference to showcase the company’s new logo, Paras Chowdhary, Managing Director, Ceat, said, “We will set up two new plants over 2-3 years to make radial tyres for trucks and cars and for speciality tyres. A plant is likely to come up at Ambarnath near Mumbai and we are scouting for a location for our second plant which could be in Gujarat, Karnataka or Tamil Nadu.”

The investment will be financed through internal accruals, borrowings and from the sale of surplus land.

The company had earlier sold seven acres of surplus land at its site in Bhandup, Mumbai, for Rs. 130 crore and still has 23 acres of surplus land there. The company would also consider re-locating its entire plant from Bhandup to Ambarnath in future. “In 2007-08, the topline touched Rs. 2,600 crore and we are likely to report the highest ever profit. Our challenge is that every global tyre player is entering the $4 billion Indian tyre market and radial tyres which account for 13 per cent of the market now, will dictate the future. We also face low-cost competition from China,” said Mr. Chowdhary.

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