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JK Tyre & Industries Ltd today said it plans to invest over Rs 800 crore to double the capacity of Chennai manufacturing facility over two years.
Besides, the company is looking to invest $25 million at its Mexican subsidiary Tornel to increase capacity by 25% in the next twelve months.
"We plan to invest over Rs 800 crore on our Chennai plant, thereby doubling the capacity of the facility to around five million tyres per annum over the next two years," JK Tyre & Industries Chairman & Managing Director Raghupati Singhania told reporters here.
The company, which today posted a 60.96% decline in its standalone net profit at Rs 33.70 crore for the quarter ended March 31, makes radial tyres for various types of vehicles including trucks, buses and passenger cars.
JK Tyre has already invested around Rs 900 crore on the Chennai plant, Singhania said. The company is also in the process of investing Rs 150 crore at its two facilities in Mysore and Kankroli (Rajasthan).
On the Mexican unit, Singhania said: "We plan to expand the Tornel capacity by 25% at an investment of $25 million... The additional capacity will come in 12 months."
Tornel's annual capacity stands at 3.6 million tyres, which will go up to 4.5 million after expansion, he added.
When asked about the company's plans for the fast growing South East Asian region, Singhania said it is looking at establishing a manufacturing footprint in the market.
"We are looking at opportunities and are still to identify any target... Could invest in the range of Rs 100-150 crore," Singhania said.
When asked about growth prospects of the Indian auto industry, Singhnia said that six months down the line the industry would be able to do better on account of various factors including some softening of interest rates.
Meanwhile, the company's board, which met today appointed Raghupati Singhania as the Chairman of the company.
The company said its net sales declined to Rs 1,377.19 crore for the fourth quarter ended March 31, from Rs 1,485.39 crore in the year-ago period due to subdued market conditions.
However, for the 2012-13 fiscal, JK Tyre posted Rs 105.54 crore profit. For 2011-12, it was Rs 11 crore only.
On a consolidated basis, the company's net sales in 2012-13 stood at Rs 6,948.85 crore, as compared to Rs 6,753.11 crore in previous fiscal.
The company's board has recommended a dividend of Rs 3.50 per share - 35% for 2012-13.
JK Tyre scrip closed at Rs 117.55, up 1.82% from previous close, on the BSE.
