CEAT expands capacity at Nashik Plant

Nasik : Leading tyre maker CEAT has increased its production capacity at the Nashik Plant by over 1000 tonnes per month, said the company on Wednesday.

The CEAT Nashik plant produces truck, LCV and agricultural tyres. The capacity of the plant has increased for the truck by 170,000 nos. p.a., LCV by 96,000 nos. p.a. and Tractor Rear categories by 50,000 nos. p.a.

This expansion adds up to 1000 tonnes per month. CEAT sees a robust opportunity for increasing its market share in these segments.

With this expansion the company aims to increase its overall market share by more than 2%.

CEAT has invested Rs 20 cr for the expansion.

The company has achieved technological superiority by installing state-of-the-art machinery as a part of its production capacity expansion.

Though CEAT is the highest exporter of truck and LCV tyres, through this expansion, the company is also looking at addressing the export demands and further increasing its market share in the international terrain.

Maharashtra is the second largest State of India and it is also a very important region for CEAT. The state is well connected by rail, road and airways. This helps CEAT to boost its distribution cycle.

?The Government norms have been favorable and we are very optimistic about Nashik as our preferred base for manufacturing of truck, LCV and tractor tyres. In fact, we have also applied for relaxation of octroi with the authorities and are sure that they will be supportive,? said Hundal Singh, Vice President – Manufacturing, CEAT Ltd.

Singh further said: ?The agricultural and industrial growth in the country has been robust and is expected to remain so in the medium term future. Radialisation is fast catching up in the commercial segment (currently at 10-12 % and projected at 25-30% by FY14).

?While radialisation will increase in the country, bias tyres are expected to remain the major force in commercial & farm segment in the 5-7 year horizon.?

Economies of scale attained by expansion in capacity will help CEAT realise better margins in an industry where the ROI is totally dependent on raw material costs, especially natural rubber and Government levies, claimed the company.

Natural rubber prices have seen an unprecedented spike in the last 15 months.

CEAT aims to increase its total market share by about 2% through this market focused and market driven manufacturing strategy.