Ceat Plans To Raise Rs 150cr Equity
The R P Goenka-owned tyre company Ceat Ltd is considering raising up to Rs 150 crore through the equity route to meet the company's long term financial requirements.
The company will seek shareholders' approval at the forthcoming annual general meeting scheduled for September 10 to offer, issue or allot either by way of a public or rights/private placement an aggregate sum not exceeding Rs 150 crore.
Meanwhile, the company is also exploring the possibility of setting up a third unit. It currently has manufacturing units at Nashik and Bhandup in Maharashtra with an installed capacity of 280 tonne per day. The company is planning to enhance the capacity to 300 tonne per day by end-1998 and subsequently, to 340 tonne per day by the turn of the century.
During the period under review, the board of directors have recommended a dividend of Rs 2 per share for the year ended March 31, 1998.
The company laid emphasis on quality and installation of an extensive and worl- class supply chain management system.
Amongst the brands, `Ceat Secura' has emerged as the most sought after brand for two-wheelers with `Ceat Endura' retaining its premium position in the car segment.
While the company consolidated itself in the car radial tyres segment with the launch of `Maestro' last year, it firmed up its position with an aggressive consumer contact.
The company has also entered into more conversion arrangements. Its subsidiaries, Ceat Ventures Ltd and Ceat Holdings Ltd have made major investments in the Kerala-based tyre manufacturer Rado Tyres Ltd.
In a bid to consolidate the group's presence in the 2-3 wheeler tyre segment and reinforce its focus in their core businesses.
Efforts are on to enhance the capacity of the Kerala unit in a phased manner. In the first phase, it will increase the capacity to 100,000 tyre per month from the current level of 25,000 tyre per month, and double the capacity in the second phase, the following year.
In keeping with its long-term strategy, Ceat recently divested its 50 per cent stake in South Asia Tyres in favour of its joint venture partner, the USA-based Goodyear Tire and Rubber Co. Ceat, however, would continue to lift its offtake of radial tyres from South Asia Tyres till its own manufacturing facilities have been recommissioned.
Meanwhile, the company's Sri Lankan venture Associated Ceat Private Ltd has entered into a strategic alliance with Kelani Tyres, which will command a market share of over 80 per cent in the domestic market and will be on export base, for Ceat's branded products.