JK Industries is lining up a collaboration with the worlds fourth largest tyre manufacturer, Continental Tyres, for its newly acquired Vikrant Tyres Ltd.
This follows a decision taken by JK Industries, the flagship company of the JK group, to shift its entire truck tyre manufacturing to Vikrant in Mysore, as part of a business strategy to be a leader in manufacturing of steel belted radial truck tyres.
JK Industries, supplemented with the capacity of Vikrant, plans to combine Continentals technology with its own expertise at Vikrant to focus on radial tyre market.
Also Read
Vikrant, with its large pool of trained and skilled manpower, is expected to enhance JK Industries presence and increase its product range.
A team from JK Industries Ltd has gone to Hanover in Germany to negotiate with the $8 billion Continental for a technical collaboration, sources in JK Industries said.
By shifting its radial truck tyre manufacturing to Vikrant, JK Industries is targeting an annual production of one million radial tyres at Vikrant including one lakh passenger car tyres. The plants existing capacity is eight lakh tyres.
JK, which has decided to invest Rs 260 crore in Vikrant over next three years, plans to fully modernise the latters radial plant taking technical help from Continental. Vikrant, which has an established rib tyre `Trak King, has now an independent all steel truck radial plant.
JK Tyres, on its part, had originally a technical collaboration with General Tyres International of the US. After the Hanover-based Germany tyre giant took over the American company, it decided to honour the contract with JK. Since Vikrant is without any collaborator for its existing radial plant, JK is planning a fresh agreement with Continental.
Vikrant had originally a collaboration agreement with Avon of UK But the Vikrant board had terminated the agreement some years ago. However, Avon Technical Services Ltd, refused to accept the termination. Following this, Vikrant filed a suit for declaration and obtained interim order restraining Avon from enforcing the agreement against the company.
JK Tyres currently produces tyres for trucks, buses, passenger cars, jeeps, light commercial vehicles and tractors.
The company has a present installed capacity of 29.67 lakh tyres, at its two plants: Jaykaygram (Rajasthan) and Banmore (MP).
According to Raghupathi Singhania, managing director, JKI, here, the acquisition of Vikrant will fully consolidate the companys leadership. Together, these two will become the only manufacturer of truck radials in the country, he said.