JK Tyres gives go-head on car, OTR projects

By David Shaw ERJ staff

New Delhi, India -- JK Tyre and Industries Ltd has given the go-ahead to its car radial tyre expansion project at Banmore (Gwalior) in INdia. The company is expanding its capacity from the present 4.4 million tyres to 5 million tyres at an approximate cost of Rs. 500 million (euro 7.6 million). In addition The company is also working on a greenfield site project for 2.5 million PCRs with an investment of Rs. 3000 million (euro 46 million). Raghupati Singhania, managing director said, "We are in the process of finalizing an ideal site for the same, which is most likely to be located in southern part of India - closer to the upcoming auto industry hub."

JK had previously put the project on hold, citing the economic downturn, but SInghania said that "due to the slow down in market, last year, we had put our project of expansion oassenger radial on hold, but with sentiment improvement, we have decided to go ahead with this expansion."

In addition, JK has given further details of its project to increase the capacity of its off-road mining tyre operations, and to increase the range of sizes. This project is closely linked with the Indian equipment maker, BEML. BEML has given JK a loan of Rs. 1000 million (Euro 15 million) out of total project outlay of Rs. 1200 million.

JK currently has capacity for 35 000 cross-ply tyres/year in its OTR category at its plant in Mysore. Singhania said this gives it a market share of 42 percent in India, although the majority of these cross-ply tyres are exported. The BEML project will increase this by 4000 u/year. The next phase, said Singhania, will be to add radial capacity, and to increase the range of sizes available.

Up to now, JK has delivered around 17 tyres to BEML for approval. These are in 35-inch sizes. Once the project is complete in March 2010, JK will be making tyres up to 57-inches at the rim size .

Singhania said, "The present demand of OTR tyres in India is 95,000 units. per year, out of which most of Ultra large size tyres are being imported. Indian demand is expected to grow by 10 percent over the coming two years.

JK therefore intends to participate in that expansion, and is currently planning another project of approximately 5,000 tyres per year, which is likely to be at an outlay of Rs. 1500 million. This will be taken up after completion of this first phase and will be completed by mid 2012.