Unfazed by the economic slowdown, the Harsh Goenka-led RPG Group has earmarked an investment of Rs 15,000-20,000 crore for expansion over three years.
"We will be investing around Rs 15,000-20,000 crore over three years. The investment would be basically to consolidate on our existing verticals, primarily in power, tyre, biotechnology and retail. These investments will come at a time when other companies have been hit by slowdown. We are one of the few companies who are serious about our investment plans," said Harsh Goenka, chairman of RPG Enterprises. He was speaking at the foundation stone laying ceremony of CEAT's greenfield radial tyre plant at Halol near Vadodara. CEAT is the group's flagship company in the tyres vertical.
The Rs 13,500-crore RPG Enterprises is setting up a power cable and accessories plant in Gujarat for which the group has been scouting for land. It has also planned to set up a carbon black unit, along with a captive power plant at Mundra, at an investment of Rs 350 crore.
"More than 50 per cent of the investment will focus on the power verticals such as transmission, cables and accessories, followed by tyre, carbon black, retail and biotechnology," Goenka said. The group is also expanding the operations of RPG Lifesciences at its Ankleshwar plant. "We are focusing a lot on research and development of biotechnology, oncology and anti-cancerous drugs," Goenka added.
In tyres, CEAT will be investing around Rs 1,500 crore in a phased manner to set up a radial tyre plant at Halol near Vadodara. At an initial investment of Rs 700 crore, the first phase of the greenfield plant will be completed by May 2010 and manufacture around 4 million tyres a year, including 2.5 lakh truck radial tyres.
The capacity will be augmented to 12 million tyres in 10 years at an additional investment of Rs 800 crore.
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"The new plant will raise our market share in car and truck radial tyres to 15 per cent," said Paras Chowdhary, managing director of CEAT. Currently, the company has a 5 per cent market share in car radial tyres, while it will be manufacturing truck radial tyres for the first time.
The company also plans to expand its retail presence in the country by adding 200 stores in the next two years. "We are also entering into a joint venture with the US-based Au Bon Pain, a premium bakery-cum-cafe chain.
By July 2009, we will be rolling out the first Au Bon Pain premium bakery-cum-cafe shop in Bangalore."