Home BusinessJK Tyre to invest Rs 1,200 cr on expansion
JK Tyre & Industries today said it will invest Rs 1,200 crore over the next 3-4 years in expanding its capacity, including setting up a greenfield car radial plant in South India.
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"We are planning to invest another Rs 1,200 crore during the next 3-4 years for expansion of the company"s capacity. Our focus will continue to be in the domestic market, even while we will try to grow in the overseas market," JK Tyre & Industries Chairman H S Singhania said while officially inaugurating its truck and bus radial plant here.
The company currently produces 158 lakh units of tyres globally of its three brands — JK Tyre, Vikrant and Tornel. The four Indian plants contribute 92 lakh units, while the rest come from the three Mexican plants.
By March 2010, the total capacity in India would be expanded up to 98 lakh including addition of 5 lakh units of car radials at the plant near Gwalior in Madhya Pradesh.
As part of its expansion plans, the company would set up a greenfield car radial plant.
"The greenfield project for car radials is likely to come up in one of the Southern states — Karnataka, Andhra Pradesh or Tamil Nadu," JK Tyre & Industries Marketing Director A S Mehta said.
The proposed plant would be set up at an investment of about Rs 400 crore and would have an initial production capacity of 25 lakh units per annum, he added.
Mehta further said JK Tyre could consider producing truck radials at the proposed greenfield car radial plant or expand capacities at the Mysore units as it aims to ramp the capacity of truck and bus radials to 12 lakh units annually in the next two years.
Besides, the company is putting in Rs 120 crore for ramping up the off-the-road tyre production at Mysore plant to 42,000 units per year from the current strength of 39,000 units per annum, he said.
"The 3,000 units additional capacity is for large tyres, including a 12 feet high model for use in 240 tonne dumper. This will be completed by March 2010," he added.
The company has already doubled the capacity for bus and truck radials to 8 lakh units from 4 lakh units per annum at the Mysore plant with an investment of Rs 315 crore.
Talking about its Mexican venture Tornel, Mehta said, "At the moment, the Mexican factories are working at 80-90 per cent capacity utilisation and our intention is to maximise utilisation even more."
The current capacity of three factories in Mexico is 66 lakh units a year, including around 60 lakh units of car tyre.
"We are targeting the after market in the NAFTA (North American Free Trade Agreement) region. We have started manufacturing the JK brand in Mexico and we are looking to export to the NAFTA markets including the US," Mehta said, adding it would export conventional truck and bus tyres.
The company currently exports to 80 countries across the world.