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Manu P. Toms

Mumbai, April 7 Tyre major JK Tyres is scouting for suitable land for a greenfield project to manufacture passenger car radial tyres.

“We are falling short of capacity and we are planning a new plant,” Mr Arun Bajoria, President, JK Tyre & Industries Ltd told Business Line.

Mr Bajoria said the company is looking for locations in Karnataka, Tamil Nadu and some States in the north.

The greenfield project is part of the company’s plans to expand radial tyre capacity from 3.68 lakh tyres to 8 lakh tyres, he said.

The financial details of the project are being worked out. However, Mr Bajoria said, “We are also expanding in our existing plants. Altogether we will be spending Rs 1,182 crore in the next five years on all our expansion projects. Of this, Rs 480 crore will be spent by December 2008,” Mr Bajoria said.

The projects will be funded by internal accrual and project financing from financial agencies, he said.

As regards future projects, the company is focusing more on radial tyres. At present JK tyres is producing 26 lakh bias tyres against 3.68 lakh radial tyres.

The company sees good prospect in truck radial tyre manufacturing. “About 94 per cent of tyres are radial in cars but truck radialisation is just about 5.5 per cent. This should be 10-11 per cent in a few years. By 2010, radialisation in truck segment will be around 20 percent,” said Mr Bajoria.

The tyre industry has been demanding for incentives as the mass radialisation in trucks and bus segments is supposed to help reduce fuel cost substantially. It is considered that radial tyres with lesser rolling resistance will enhance mileage.

The frequent launches of newer models by automobile manufacturers and better road infrastructure will work in favour of tyre industry, he said.

“Last year we had a turnover of Rs 3206 crore of which about Rs 500 crore came from export. We are aiming to be a billion dollar company,” Mr Bijoria said.

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