JK Tyre to invest in Chennai plant
At its board meeting on 24 October, the directors of JK Tyre & Industries Ltd approved a RS 14.3 billion (£144.5 million) expansion of its Chennai factory in eastern India.
Commenting on the investment, chairman and managing director Dr. Raghupati Singhania said “the long-term prospects of the Indian economy and particularly [the] automotive industry remain strong. It is expected that despite [the] current slowdown, demand growth is likely to bounce back in the next couple of quarters. The company, keeping in view the long-term demand growth, is undertaking expansion of its Chennai facility for both truck/bus and passenger car radials.”
News of this expansion accompanied the release of JK Tyre & Industries’ financial results for the quarter ending 30 September 2013, the second quarter of the company’s financial year. Consolidated turnover amounted to Rs 19.6 billion (£198.1 million) while operating profit rose 46 per cent to Rs 2.15 billion (£25.3 million). Pre-exceptional profit rose 78 per cent to Rs 1.1 billion (£10.8 million).
The company reported favourable export revenues and although segment revenue at the company’s operations in Mexico decreased year-on-year from Rs 4.2 billion to Rs 3.7 billion (£37.4 million) in the three months to 30 September 2013, profit before pre-exceptionals and tax rose 42 per cent to Rs 440.1 million (£4.4 million). “JK Tyre achieved [its] highest ever export [revenue] of Rs 450 crores (£45.5 million) in this quarter,” stated Dr. Singhania. “The Mexican operations continue to perform well and have added to the profitability of the company. Expansion of passenger car radials to enhance its capacity by 25 per cent is currently under way at JK Tornel.”