The Tamil Nadu government has cleared JK Tyre’s proposal for setting up a new production facility, which would attract around Rs 1,600 crore investment, in the state. The facility was expected to generate around Rs 2,000 crore revenue in 2013-14, according to company officials.
According to sources in the government, the state Cabinet chaired by Chief Minister M Karunanidhi cleared the proposal in a meeting on Monday. Company officials also confirmed the development. The facility is to come up at Sriperumbudur, near Chennai, where 100 acres will be allocated to JK Tyre.
Speaking to Business Standard, AS Mehta, marketing – director, JK Tyre, said construction work would start immediately and production by the second half of 2011. “Phase I investment will be around Rs 800 crore,” he said.
The plant will have an initial capacity of 2.5 million car tyre and 200,000 radial tyre for trucks and buses.
The company will invest another Rs 750-800 crore in phase II to increase the capacity of car tyres to 5 million and for trucks and buses to 700,000. “The plant will predominately cater to the domestic market and this would bring revenues of around Rs 2,000 crore by 2013-14,” he said.
“Chennai will be an important centre for our manufacturing and research and development,” said Mehta, adding the target customers would be automobile majors.
The company caters to north India through its manufacturing facility at Gwalior.
In the south, it has a facility at Karnataka, where it manufactures around 800,000 truck radial tyre.
“We are in the process of increasing the capacity to 1 million with an investment of around Rs 150 crore,” added Mehta.