Madras Rubber Factory Limited (MRF), leading tyre makers in India has bagged the ‘Ultra Mega Project Status’ for its proposed expansion of Perambalur and Arakonam units in Tamil Nadu. An amount of INR 4,500 crores has been announced for expansion of MRF Tamil Nadu plant over a period of the next seven years and a Memorandum of Understanding to this effect is to be signed by the company with State Government of Tamil Nadu.
As on date, MRF Tyres has a total of 8 manufacturing units in South India located in Tamil Nadu, Hyderabad and Goa which have a combined capacity of 1.2 lakh tyres per day. This increased investment in MRF Tamil Nadu plant to boost capacities will be formally announced at the upcoming Global Investors Meet at which the MoU will also be signed.
Proposed investment announced by MRF Ltd. is slated to be funded from internal accruals while ‘Ultra Mega Project Status’ accorded to MRF will entitle the company to a large number of benefits which will include VAT related fiscal incentives, soft loan for 16 years and uninterrupted power supply besides other benefits.
Major investment will be directed to the company’s Perambalur plant which accounts for one fourth of company’s production while the Arakonam plant produces defence helicopter tyres. The company’s Perambalur plant was set up as a Greenfield project in 2008 at an investment of INR 900 crores for the manufacture of truck and car radial tyres. Initial capacity was at 3.5 lakh tyres per month which was increased in stages.