 "TVS Srichakra plans Rs 160 crore capex")
TVS Srichakra, the tyre making company of Chennai-based TVS Group, plans to spend Rs 160 crore as capital expenditure for further expansion of two and three-wheeler tyre capacities at its manufacturing plants.
The company, which is amongst the top three two and three-wheeler tyre producing companies in India, will increase overall capacity to 2.5 million tyres per month this year from the current 2.3 million tyres a month.
This fresh investment will take its capital expenditure to Rs 310 crore in two years. Last year the company expanded its capacities in Madurai and Rudrapur to 2.3 million tyres a month from 2 million tyres a month with an investment of Rs 150 crore.
P Vijayaraghavan, director, TVS Srichakra said, "We increased capacity to 2.3 million units a month by December 2015. Now we are further expanding it to 2.5 million units this year and a capex (capital expenditure) of Rs 160 crore will be made for it."
The expansion comes at a time when the two-wheeler segment is expected to grow in double digits this year backed by expectations of a favourable monsoon and continued growth in penetration of scooters in to the rural areas.
According to data supplied by the Society of Indian Automobile Manufacturers the two-wheeler segment grew by 3% last year to close at 16.45 million units as against 15.97 million units sold in 2014-15.
The growth, however, jumped to 21% in April to 1.56 million units as compared to 1.28 million units sold in the same month last year. The increase was led by a growth of 36% in scooter volumes and 16% growth ion motorcycle volumes.
"The growth of scooters have been very good and we expect the momentum to continue. Scooters are a big segment for us", added Vijayaraghavan. Besides increasing capacity of 2 and 3-wheeler tyres TVS will also invest to increase capacity for off-road tyres targeted for the export market.