The Hindu Business Line : Ceat firming up plans for two greenfield facilities

Expansion drive
The company is in final stages for 60-tonne OTR facility near Mumbai.
The new unit will primarily cater to the export market.
For the radial facility, Ceat may opt for joint venture or product sharing route.

Kolkata May 22 Ceat Ltd may finalise investments in two greenfield facilities this fiscal. While plans are near finalised for setting up a Rs 250-300-crore specialty tyre unit near Mumbai, the company is currently exploring technology options for a Rs 450-500 crore truck-bus radial facility outside Maharashtra.

According to sources, chances are high that the company may opt for joint venture or product sharing route with an overseas partner for the radial unit. Ceat currently has facilities in Nashik and Mumbai.

Sources said that the company was in the final stages of firming up plans on a 60-tonne specialty or off-the-road (OTR) tyre unit near Mumbai, primarily to cater to the export market.

The project will formally be kicked off once the requisite land is acquired. The company has already shortlisted two to three locations closer to Mumbai port for the new OTR capacity and is expected to close the deal in the next few weeks.

"It will be India's largest OTR facility. We are now waiting for the land acquisition to be completed to kick off the project by the second quarter of this fiscal," a source said, adding that the company was hoping to acquire up to 100 acres for the facility. The proposed new facility, coupled with the ongoing Rs 50-crore expansion of the existing plant, would take the company's cross-ply OTR capacity to approximately 100 tonnes a year in the next two years.

Ceat currently produces 20-tonne OTRs. The capacity will be expanded to 40 tonnes this fiscal. Roughly 90 per cent of the output is now exported.

Radial Facility

Meanwhile, Ceat is making steady progress towards firming up plans for truck-bus radial unit within this fiscal. While discussions are on with the handful of global leaders in radial technology, sources feel that a pure technology tie-up might not be possible. "None of the global leaders in radial technology are willing to share the technology at this juncture. Accordingly, we may have to settle for alternatives like product sharing or joint venture route for the radial unit," a company official said.

"We are trying to ensure availability of cutting-edge technology for the proposed facility. It will take some time. However, we are confident to firm up the project this fiscal," he added.

Ceat sources truck radials from Pirelli of UK.

On possible location, sources said that Tamil Nadu, Andhra Pradesh, Karnataka and Gujarat are on the radar.