Ceat shifting tyre plant out of Mumbai, say reports
By Our Corporate Bureau | 08 Aug 2007
Mumbai: RPG Group company Ceat Ltd. is planning to shift its tyre factory at Bhandup in suburban Mumbai to Patalganga, 60 km away from Thane, to save on octroi and costs, reports said.
Under the plan, the 250 tonne plant will be dismantled and moved in phases and its 3,000 employees relocated.
The company will also dispose of 6.5 acres of surplus land in the plant. The company owns 31 acres of land in Mumbai worth around Rs500 crore at current market prices, reports said.
Mumbai levies octroi on all goods that enter city limits. Ceat, which reported a net profit of Rs 9 crore in the year to March 2007, paid about Rs13 crore in octroi alone.
Reports also said a part of the plant may be shifted to Ceat's Nashik facility, where capacity is being augmented to feed growing demand.
Ceat will set up a greenfield facility at Patalganga for truck and bus radials in the first year, which would be later used to produce car, tractor, specialty tyres such as off-roads, and mining tyres with an estimated cost of Rs500-600 crore.
The move is expected to bring windfall gains for RPG group. In addition to savings in octroi, the sale of land could help the group unlock value to the tune of around Rs500 crore.