Ceat Eyes Nepal, Bangaldesh Markets

The RPG flagship Ceat is planning acquisitions and joint ventures in Nepal and Bangladesh. As part of it, the tyre company's executives have already visited the two countries and held preliminary talks with local players.

"We are exploring possibilities in the both countries, but things have not come to a final shape," said S Samuel, the company's managing director. The idea behind the expansion is to cater to the needs of the local markets. Once the local needs are met the surplus will be exported, he said.

The primary attraction for setting up shops in these countries is the comparatively cheap labour available there, Ceat executives said. Ceat has already started operations in Sri Lanka through its arm, Associated Ceat. Apart from south Asian market, it has identified Latin America as a thrust area.

 

Another reason for exploring overseas markets is that new players in the Indian automobile sector like Hyundai and Daewoo already have tie-ups with other foreign players for tyres. Consequently, the company is putting its focus on the replacement market which gives it a huge margin in sales; but this too has stated showing a slowdown.

Ceat is further hamstrung with a tie-up with Maruti which is witnessing a decline in sales.

Meanwhile, the company is planning to invest Rs 4-5 crore in increasing its retail outlets -- Ceat Shoppe-- by opening 20 shops by March 2001.

New outlets will be opened in Kerala, Orissa, Delhi, Mumbai and Coimbatore. About 33 per cent of the radial tyre sales are done through these shoppes.

Ceat's new plant at Nashik is undergoing trials. This is besides the plants in Ernakulam and Mumbai. The Nashik plant, set up at a cost of Rs 60 crore to make radial tyres, may begin production by December.