CEAT Kelani to invest Rs 3b in Sri Lanka’s tyre industry

Unveils master plan to set up new truck bus radial tyre plant, double production of radials and motorcycle tyres and grow exports


(From left), Rohan Fernando - Executive Director CEAT Kelani Holdings, Anant Goenka - MD CEAT Limited, India, Chanaka De Silva - Chairman CEAT Kelani Holdings, Vijay Gambhire - MD/CEO CEAT Kelani Holdings, Tilak de Zoysa - Vice Chairman, CEAT Kelani Holdings, Ravi Dadlani – Vice President Sales, Marketing & Exports CEAT Kelani Holdings.

CEAT Kelani Holdings today announced an infusion of Rs 3 billion in new investments for the enhancement of manufacturing capacity, new product development and growth of exports, in a significant vote of confidence in the prospects for the India – Sri Lanka joint venture tyre manufacturing operation.

The investments, made up of internal funds and borrowings, will see the establishment of a state-of-the-art plant in Kelaniya for the manufacture of Truck Bus Radials (TBRs) and the expansion of the existing cutting-edge passenger car radial tyre plant at the same location, the company said.

New machinery already on the way from Europe, when commissioned circa June-July 2018 will commence the production of Truck Bus Radial Tyres. The Company also plans to double CEAT Kelani’s Passenger Car Radial (PCR), Van and SUV radial tyre production from a current 500,000 tyres a year to 850,000 a year, CEAT Kelani Holdings Chairman Mr Chanaka de Silva told media at a news conference in Colombo today. The company’s Motorcycle tyre manufacturing capacity, currently at 375,000 tyres a year, would also double as a result of the investment, Mr de Silva disclosed.

The first ever domestic production of Truck Bus Radials in Sri Lanka will lead to noteworthy import substitution, substantial saving of foreign exchange, the transfer of the latest international knowhow and technology for the manufacture of this category of tyre, and the launch of TBRs designed and built for local conditions, he said.

"This new investment is part of CEAT-Kelani’s Investment Master Plan in Sri Lanka, and is projected to generate a substantial increase in turnover over the next three years from Rs 10.5 billion in 2016-17, de Silva added. The joint venture’s cumulative investment in Sri Lanka to date totals Rs 5 billion.

Anant Goenka, Managing Director of CEAT Limited India, and CEAT Kelani Holdings Managing Director Mr Vijay Gambhire joined their fellow directors of the Joint Venture (one of the most successful ventures benefitting from the Indo-Lanka FTA), at the announcement of the new investments.

"CEAT India is happy with the progress of the Joint Venture in Sri Lanka, which completes 20 years this year," Goenka said. "Our focus now is on taking the extensive portfolio of Sri Lanka made tyres to the next level in terms of performance specifications and attributes, to keep pace with product developments in highly developed markets. CEAT India has already gone down this road, and CEAT Kelani enjoys the benefit of our technological knowhow and market experience," Mr Goenka said.

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