JK Industries to spin off tyre business

Mumbai, India - J K Industries Ltd has informed BSE (the stock exchange in Mumbai) of its intention to demerge the company's tyre activities into an as-yet un-named separate undertaking. According to the statement, "This shall provide residual tyre business an opportunity for more focused approach and enable value maximization to all the stakeholders."

The draft proposals were adopted by the management board at a meeting on 8 February. JK is being advised by Ernst & Young Pvt Ltd (E&Y) and M/s Amarchand Mangaldas & Suresh A Shroff & Co (AMSS).

In the announcement, JK said, "the Company recently expanded its truck radial capacity by 50% and passenger radial capacity by 30% at a total cost of Rs 1600 million. It thus continues to enjoy its predominant position in truck and bus radial market accounting for 85% of production and further enhanced its leadership position in Passenger Radial segment."

The statement concluded, saying, "the Company has the unique distinction of achieving an important landmark being ranked No. 1 in the Tire Customer Satisfaction Index Study conducted by J D Power Asia Pacific 2005 India. This distinct accreditation along with most coveted recognition of 'Superbrand' amply demonstrates the Company's commitment of its customers and its leadership in the Indian Tyre Market."

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