Export markets a focus for Ceat agricultural tyre plant project
Indian tyre maker Ceat Ltd reports it has given its wholly-owned Ceat Specialty Tyres Ltd (CTSL) subsidiary land in Ambarnath, near the city of Mumbai, for the purpose of erecting a new greenfield radial OTR tyre factory on the site, and has further aided the project through an Rs 250 million (£2.6 million) equity investment in CTSL in the October to December 2015 quarter. Altogether, CTSL will invest Rs 3.3 billion (£33.8 million) to build a plant with an initial daily capacity of 40 tonnes.
“Given the strong growth potential in the OTR sector and its synergy with Ceat capabilities, we have taken a strategic decision to increase our focus there,” shares Ceat Ltd. managing director Anant Goenka. “CTSL has been created to ensure dedicated focus and drive towards this opportunity.”
Although the factory in Ambarnath will have a daily capacity of 40 tonnes when it enters operation in the first three months of 2017 (the fourth quarter of Ceat’s 2017 financial year), Goenka says this capacity will grow over time: “The facility, with a primary focus on export markets, will witness planned expansion over the years.”
The Ambarnath OTR tyre project will be partially financed by long-term bank financing. Approval was given at a meeting of the Ceat Ltd. Board of Directors on 12 February for the provision of an Rs 2.2 billion (£22.5 million) corporate guarantee to CTSL’s bankers as collateral for the loan or loans that CTSL is taking out.