JK Tyre to kickstart Rs 1,000 cr Chennai plant expansion soon

The proposed expansion will take company's annual output of 2.5 million passenger car radials to 4.5 million

New Delhi-based JK Tyre & Industries is planning to kickstart its Rs 1,000-crore expansion plan at Chennai in the next 2-3 months. The proposed investment is to double company's capacity at the plant, which will soon become one of its main hubs for export markets, said Vikram Malhotra, its vice president — sales & marketing.

The proposed expansion will take company's annual output of 2.5 million passenger car radials (PCRs) to 4.5 million and 400,000 truck/bus radials to 1.2 million a year. The project would be completed by 2016-17 in two phases, he said. Malhotra was here to inaugurate the company's stall at the International Commercial Vehicle Fair.

“We see good growth in the domestic market. Besides catering to the local demand, the plant will also cater to export markets and will be one of the major hubs for exports,” said Malhotra, adding, Mysore and Chennai plants were catering to around 80 countries.

The company was betting big on the replacement and export markets during the sluggishness in the OE market, said Malhotra, who expected this fiscal to be better than last year for the company.

According to him, the replacement sector is “a little” better and expected to improve further in the second half because it is usually better than the first half of the year. “We expect some more growth, but not a dramatic one in this segment,” said Malhotra.

On performance, he said, the first quarter was a season time so the company saw a marginal improvement in topline and as the input costs were steady it could make some margin. During the second quarter also, the company saw improvement in topline, but it was too early to comment on profitability since it just closed the month.

The replacement market helped in both the quarters plus exports in a way made up for the OE drop. Rupee depreciation helped in export, while the import costs went up considering that the tyre manufacturer imported large number of inputs from other countries, he added.