MRF Tyres to expand Telangana plant with Rs 980-cr investment

MRF Limited plans to invests an additional Rs 980 crore to expand the tyre manufacturing plant located in Medak district, near Hyderabad, company chairman K M Mammen informed Telangana chief minister K Chandrasekhar Rao on Thursday.

Set up in 1999, the Medak plant is operating with an annual turnover of Rs 4,300 crore and employs about 6,500 people, the chief minister’s office said quoting company officials.

“The chief minister assured the company of all support for the expansion project by the government. He also said there would be no power cuts to the industry in Telangana and ample water would be provide for the industry once the ongoing water grid project is completed,” a release stated.

Mammen also informed the chief minister the expansion would create an additional 900 jobs at the factory. Medak is the home district of KCR.

On March 23, MRF informed the stock exchanges that as part of the expansion plant it proposes to invest Rs 4,500 crore in its plants at Perambalur and Arakonam in Tamil Nadu over a period of seven years.

According to the filing, the Tamil Nadu government had decided to accord ‘ultra mega project’ status under the Tamil Nadu Industrial Policy. “The memorandum of understanding between the company and the government is expected to be signed shortly,” it said.

The proposal to expand the Medak factory comes on top of this expansion plan. In an extraordinary general meeting (EGM) of the company on February 12, the shareholders had approved a proposal to raise the company borrowing power to Rs 5,000 crore to fund the expansion.

MRF posted a net profit of Rs 323.5 crore for the quarter ended December 2014, as compared with Rs 179.9 crore in the same quarter previous year. Total income for the quarter stood at Rs 3,378.63 crore as compared with Rs 3,210.51 crore in the corresponding previous quarter.