Ceat to open Bangladesh JV factory
India’s Ceat Ltd will start manufacturing tyres in Bangladesh as of next year through a joint venture operation with Bangladesh-based business conglomerate AK Khan & Co Ltd. The tyre maker will hold a 70 per cent share in the new company, Ceat AK Khan Bangladesh Ltd, with AK Khan & Co. possessing the remainder. Ceat AK Khan Bangladesh will produce cross-ply truck, light commercial vehicle and motorcycle tyres for the domestic market. The joint venture has been set up with an initial investment of US$67 million and will have a 110 tonne per day capacity when production commences. Around 1,000 people are expected to be employed in the new company.
According to AK Khan & Co., Ceat will supply technical and commercial expertise and manage the joint venture operations, while AK Khan will provide its knowledge of the Bangladesh market and utilise the strength of its local presence.
“The plant will earn valuable foreign exchange for the country by exporting around 20 per cent of its output to the north-eastern part of India and the rest of the world,” commented AK Khan managing director Salahuddin Kasem Khan to Bangladesh-based newspaper The Daily Star. Ceat managing director Anant Goenka, speaking with The Times of India, stated: “We are pleased to partner with A K Khan & Company Ltd., one of the most reputed business conglomerates in Bangladesh. This strategic partnership will enable us to establish a leadership presence in the large tyre market of Bangladesh.” Goenka added that the factory, when operating at full capacity, will be able to cater to the majority of Bangladesh’s tyre requirements.
The Daily Star estimates that around 10,000 to 12,000 new buses and trucks hit the streets of Bangladesh each year, and around 25,000 to 30,000 new motorcycles are sold there every month. The paper adds that some 1.5 million tyres are currently imported into the country each year.