Ahmedabad, Sep 29 (IANS) Tyre maker Ceat Ltd, the Rs.26-billion flagship company of the diversified RPG group, is planning a new radial tyre manufacturing plant, and is considering Gujarat as the location, a government official said here Monday.
The project envisages an investment Rs.5 billion to manufacture radial tyres for heavy commercial vehicles (HCVs) and light commercial vehicles (LCVs), the industry department official said.
The project is expected to be located in Jhagadia industrial estate, the state's major industrial hub in Bharuch, about 180 km from here.
When contacted, Ceat said a new plant for radial tyre has been planned but declined to go into any detail.
Ceat's annual report for 2007-08, however, stated it would invest Rs.10 billion on new two plants, one research and development facility, and on re-branding over the next two to three years.
The investment was being made in line with the company's long-term strategy, the report said.
Of the two new plants, one plant will come up near Mumbai, while the other will be a grassroots plant for radial tyres.
The company already manufactures radial tyres for non-commercial vehicles and LCV segments. The company's existing plants are located in Bhandup and Nashik in Maharashtra.
The company has a presence across all segments - two wheelers, passenger car, trucks and buses and specialty tyres. It manufactures six million tyres annually, and commands a 14 percent market share in commercial vehicle contributing 65 percent of the company's turnover.
The report said a strong 25 percent growth was anticipated in the current fiscal following consolidation and expansion in the Indian and global markets.
Radialisation in India is just 3-4 percent of the total market share against the world average of 55 percent. However, the segment is gathering momentum in India and is expected to reach 10 percent in HCVs and 20 percent in LCVs in the near future with steadily improving demand.
The company has celebrated it with highest ever exports of Rs.5 billion and recording highest even profits. The report says the company is geared fully to raise the 'bar of its performance and take it to the next level.'