Ceat Kelani to begin radial production

By David Shaw, ERJ staff

Colombo, Sri Lanka - Ceat Kelani Tyres is to begin making steel radial tyres for cars and light trucks at its plant in Kelaniya, Sri Lanka. Rohan Fernando, Managing Director Kelani Tyres told ERJ that the new project will be the first radial tyre unit in Sri Lanka, but because the output is aimed mainly at domestic consumption, it will be a "mini-project."

Fernando said the initial investment will be about SL Rs 300 million (€2.4 million). This will be spent on tyre building machines and curing presses, he added. Fernando said the total production at Kelaniya might reach 25 000 units per month over a number of phases, and this was just an initial phase. Even so, he added, the first radial tyres are expected to come off the production lines in financial year 06/07. "This is a strategically important project for us," he added.

Ceat Kelani is a 60-40 joint venture between CEAT India, a subsidiary of the privately-held RPG Group, and Sri Lankan company, Kelani Tyres. The company reported sales of SL Rs 2322million (€18.6 million) in 2004.

Fernando said the technology will come from the Indian parent, which is currently making radial tyres for India. The company is currently evaluating equipment suppliers in India and China.

He added that the unit will be housed in a former tube-making building adjacent to the existing mixing and calendering facilities. The old building will be completely renovated and air-conditioned, he said.

Fernando added that all radial tyres in Sri Lanka are currently imported and perform well on Sri Lankan roads. He added that the majority of imports are from China, made on Chinese equipment, so the quality of the equipment is good enough for the local market. Fernando said the Sri Lankan market for passenger car tyres is roughly 95 percent radial, while the truck market is 99 percent cross-ply.

He added that there is a 40 percent import duty on tyres imported into Sri Lanka, so he expected to be able to sell the locally-made tyres at better prices than imports.

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