JK Tyre invests Rs 1,500 crore in Chennai Plant: Production to double to 32,000 tyres per day
JK Tyres announced that it is doubling production at its Greenfield Plant in Chennai owing to continuous inflation in tyre demand. The inception of JK Tyres’ expansion plan took place in Q3 last year (2013), when the company started eyeing new acquisitions and made stratagems for new plants.
Focus was set on South-East Asia as the company predicted strong growth and increase in demand for tyres. In this regard, JK Tyre’s Chennai plant was chosen to be scaled up by the board, with an investment of Rs. 1,430 crores. The same plant already took Rs. 1,000 crores to be built and kicked off, to create capacity to make 4 lakh truck/bus radial tyres and 30 lakh passenger car radial tyres.
Now the Delhi based company is renovating the manufacturing facility to start making 8 lakh truck/bus radial tyres and 45 lakh passenger car radial tyres from the end of this year (2014), i.e., from 16,000 tyres a day overall to 32,000 tyres everyday. This also signals that JK Tyre will go on a hiring spree to increase employee count by about 50 percent, say 500 recruits.
Increased production is aimed at catering to all kinds of clientele – domestic retail, original equipment manufacturers (OEMs) and export market for OEMs and retail as well. The company aspires to export 10 to 15 percent of tyres manufactured after expansion. JK Tyre believes that heavy commercial vehicle sector will rise from Q4 this year, form the heavy dive it took – about 35 to 40 percent.
JK Tyre continues to be one of the leading tyre manufacturers in India, and is also the 19th largest in the world. Its expanse covers 90 countries across 6 continents, with 9 plants in India and Mexico. Overall, the company rolls out 20 million tyres every year.
“I’m an optimist. We believe this will be a viable capacity. While we recognise that the vehicle industry is suffering, we are positioning ourselves for when the economy turns” said Mr. Raghupati Singhania, Chairman and Managing Director.
“We have a thirst for exports and nearly 30 per cent of our Chennai capacity we are planning to export,” he added. The company is also in the process of expanding the capacity of its Mexico plant, which will cater primarily to OEMs (original equipment manufacturers) such as Nissan.
Via – Times of India