Ceat to invest Rs1,000 crore in expansion

16 April 2008

RPG Group flagship Ceat, India's fourth largest tyre maker by revenue, will invest Rs1,000 crore in the next two-three years as part of its growth strategy, including expanding capacity, strengthening R&D, market expansion and improving customer interface.

The company says it plans to raise the funds through debt, sale of land and internal accruals.

Ceat will also increase tyre prices by 5 per cent, effective April 18, due to increase in the cost of raw material such as rubber and crude oil.

The tyre maker will invest around Rs900 crore to set up two additional tyre-manufacturing plants - one plant for radial tyres and the other unit for specialty tyre making facility and OTR (off-the-road) tyres in India.

The speciality tyre manufacturing plant is likely be set up at Ambernath near Mumbai, while talks are on with three states including Gujarat, Tamil Nadu or Karnataka for setting up the radial tyre manufacturing plant, the company's managing director Paras Chowdhary said.

The two additional facilities would increase Ceat's production capacity from 550 million tones per day to 750 million tones per day, Chowdhary added.