JK Tyre in Rs 200 cr capacity spread plan

JK Tyre has earmarked an investment of Rs 200 crore to expand its production capacity to 4.04 million tyres by 2005-06. This is part of the company's plan to become a Rs 5000-crore entity in three years.

Of this, Rs 50 crore would be used to expand capacity for truck and bus radials by 46 per cent to 350,000 units annually at the Mysore plant to meet a projected rise in demand in the domestic truck radial tyre market, Arun K Bajoria, president, JK Tyre, said.

He said Rs 150 crore would be spent to expand capacity for light truck radial and conventional bias tyres. In the financial year ending September 2004, the company is expected to clock a turnover of Rs 2,900 crore.

JK Tyre, the flagship division of the Hari Shankar Singhania-promoted JK Industries, has manufacturing facilities in Kankroli (Rajasthan), Banmore (Gwalior) and two plants in Mysore.

These have a combined capacity of 2.89 million tyres. The company makes radial tyres in collaboration with Continental AG of Germany.

"The expansion of the truck radial capacity is to take care of the future growth in sales. At present, only 2 per cent of all truck tyres sold are radials. This should grow to 5 per cent in the next three years and 10 per cent by 2010," said Bajoria.

Over 80 per cent of trucks in Europe and US run on radial tyres while in South America and the Middle East, it is 60 per cent and 80 per cent, respectively.

Ajay Kapila, vice-president, marketing, claimed JK Tyre commands a 80 per cent market share in the truck radial segment. The company also sells 1.8 million light truck radials annually.

He said the demand for truck radials was expected to grow due to greater investments on roads, especially the national highways, improved financials of operators, launch of new generation multi-axle vehicles and improvement in freight movement.

Kapila said the number of tyre care centres on highways would be increased to 20 by this year-end as part of steps to improve customer services.