CEAT Tyres Ltd. officially inaugurated production at its newly developed factory, a car and motorcycle tyre plant in Kanchipuram, Tamil Nadu, just 18 months after construction began on the $200 million project.
CEAT also provided numbers saying that the plant will boast of annual capacities of 28,500 passenger car tyres and 2,500 motorcycle tyres a day. The plant has been cite as its largest car tyre plant and has been claimed as "one of the most advanced tyre plants in South Asia."
The factory will mark CEAT's first tyre plant in the southern state of Tamil Nadu and sixth in India, with the others already established in Mumbai, Nasik, Nagpur, Ambernath and Halol.
CEAT also suggested that it further plans to invest a total of $570 million in the facility over the next 10-year period and create more than 1,000 job opportunities "in the next few years."
Speaking at the opening ceremony, CEAT Managing Director Anant Goenka explained why Tamil Nadu was the ideal place to build the plant. Mr. Goenka strongly believes that state will offer the company access to many automotive manufacturers, proximity to port and a "favorable" labor environment. He also remarked that 40% of India's vehicle production is based in Tamil Nadu.
Mr. Goenka further went on to say that the facility is considered a "smart factory" that will operate at zero-emissions levels. The whole structure was built on a 163-acre site according to green building standards.
Also attending the event was Shri Edappadi Palaniswami, chief minister of Tamil Nadu, who said the factory was "a jewel in the crown of Tamil Nadu."
Claimed to be one of the first tyre factories in India to employ women on the shop floor, the facility is planning to further increase women employment in the region.
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Ceat's tyre production capacity stands at about 1,000 tonnes a day and with Chennai unit up and running, the total capacity of the company is expected to touch 1,250 tonnes a day when the Chennai unit reaches its peak of 250 tonnes a day from the current 150 tonnes.
"The factory will serve the automotive companies in this region such as Hyundai, Renault-Nissan and two-wheeler makers such as Royal Enfield. The factory will produce car radial tyres and premium bike tyres," Anant Goenka, Managing Director of Ceat, said after the inauguration of the plant.
The new factory is bound to give the company a helping hand as the tyre maker pushes to boost its market share in both segments. Ceat's market share in PCR segment is about 10 per cent, while it has about 28 per cent share in the two-wheeler tyre segment.
The new factory will also come handy for supplying to markets such as Europe, the US and South Asia. Ceat exports tyres to more than 90 countries currently from its other units.
Currently, about 60 per cent of CEAT's revenue comes from the replacement market, while the rest 30 and 10 percent come from the OEM and export segments respectively.
In terms of product revenues, two- and three-wheeler tyres contribute about 32 per cent, while truck and bus radial tyre segment brings in about 30 per cent revenues. The remaining portion is accounted by PCR, LCV, farm and speciality segments.
