CEAT Gears Up For Investment To Scale Production, Expects A Surge In Demands
Published On 27-Jul-2021
The leading tyre maker of the country mulls to invest Rs 1000 crore over various expansion projects in the present financial year.
With an expected rise in the demands in India and abroad, CEAT plans to put in a major investment to enhance its production capacity to 1400 tonnes per day in the span of the next 1.5 years. The tyre brands’ global sales, in the post COVID era, are about to be restored in most regions worldwide. Meanwhile, the domestic market is also getting better and it expects sales to rise manifold in the next quarters.
Elaborating their investment plans, CEAT Tyres Managing Director Anant Goenka said that their total production capacity is 1100 tonnes per day which they plan to raise to 1300 to 1400 tonnes per day in the next one and a half years.
He said that they have already invested in a bunch of projects very recently in India. Goenka said, “We had announced a Rs 3,200 crore investment in the passenger car facility in Chennai. The plant is ready for the last one year and we are at good levels of capacity utilisation there.”
Moreover, for the off-highway tyre segment expansion, they used around Rs 100 crore while another Rs 1,200 was invested for the growth of truck radial tyres. In FY 20-21, they plan to invest around Rs 1000 crore to boost their expansion plans.
Also Read: CEAT Q1 Result: Tyremaker Reports Profit Of 23 Crore
Due to the second wave of COVID-19, their demand did take a hit as various OEM factories were shut, lockdowns and restrictions were in place for many weeks. Meanwhile, the rising raw material cost added fuel to the fire.
However, June and July months have been encouraging with business returning to the usual, particularly in passenger vehicles and two-wheeler segments. He hinted at some price rise on its products to offset the rising input costs in the coming months. Admitting that margins will take a slight hit, Goenka was optimistic about the second quarter being better than the first; however, the only spoilsport could be the possible third wave of the corona.
Globally, CEAT operates in close to 80 countries. On the question of entering new markets, Goenka said that they are now focussing on going deeper into these markets rather than adding more countries to their list. Europe is an important market for them and so is Germany, where they recently forayed into passenger car tyres and seeing good growth. For off-highway tyre space, the USA remains to be a key market for them, he added.