Ceat Shortlists 4 Locations For New Production Unit

RPG-controlled tyre major Ceat Ltd has shortlisted Tamil Nadu, Andhra Pradesh, Karnataka and Pondicherry as possible locations for a new production facility. Ceat's Sri Lankan operations have also secured a massive boost, with the company now controlling 60 per cent market share in the `Emerald Island'.

While Kerala also figures in the list of probables, sources said it was unlikely the new facility would be set up there. This is despite the presence of Harrisons Malayalam and Phillips Carbon Black, two other RPG group majors, who have units in Kerala.

The firm has decided to set up a radial facility at Nasik, and in the meantime, is sourcing its radial requirement from South Asia Tyres.

It's agreement with South Asia Tyres is valid for a minimum period of two years. Importantly, it was at Nasik that Ceat used to manufacture its radials earlier.

The new Nasik plant envisages churning out 30,000 to 40,000 radial tyres per month, with an investment of between Rs 50-60 crore. This, the sources said, should be on stream before the South Asia Tyres agreement comes to an end. Ceat, on another front, is the only Indian tyre maker with international manufacturing facilities, by way of its unit in Sri Lanka _ Associated Ceat P Ltd (ACPL). "The company now enjoys a 60 per cent market share", said sources

In line with its aggressive expansion plan, Ceat also proposes to raise production at its Bhandup factory in Mumbai by 40 tonne a day.

Earlier this year, Ceat had acquired Rado tyres. Rado is a two-three-wheeler tyre maker with a capacity of 25,000 tyres per month. Given the imminent boom in the two-wheeler market, the company now plans to expand Rado's capacity in a phased manner to 200,000 tyres a month over the next two years.

The company is on the lookout for possible targets, but maintains that no clear unit has been identified as yet. However, the route of acquisitions, as has been underscored by Ceat earlier, remains one with immense possibilities for the tyre company.