The RPG Group-owned tyre maker will make investments about Rs 1,200 crore to extend manufacturing capability over the subsequent 18-24 months, as a part of a four-year, Rs 3,500-crore capex plan, which it had placed on maintain as a result of Covid-19 pandemic final 12 months after pumping in over Rs 2,200 crore.
Manufacturing is excessive throughout crops and there has already been a capability constraint for farm gear tyres and a quick scarcity of two-wheeler tyres throughout Diwali, Anant Goenka, managing director of Ceat Ltd informed ET.
“Utilisation ranges are excessive. We’ve accomplished a big funding and people expansions are taking place now. It has been happily well-timed,” Goenka mentioned.
Goenka mentioned there have been considerations inside the firm in April final 12 months on the onset of the virus outbreak over the returns on investments in plant capability as gross sales nosedived throughout the lockdowns and brief time period outlook was bleak, however that “issues bounced again fairly effectively and fairly quick.”
The corporate is investing in doubling passenger automotive tyre manufacturing capability to 40,000 a day. Already, 5,000-6,000 tyres of the brand new capability are being manufactured a day, and the rest will probably be achieved within the subsequent 9-12 months, he mentioned.
The corporate expects exports to double over the subsequent 2-Three years with a pointy concentrate on Europe. It has additionally benefited from restrictions on import of tyres since June this 12 months, which has opened up about 3-5% of the market earlier cornered by tyres from overseas, Goenka mentioned.
Main world tyre maker Michelin mentioned in a letter to sellers final week that it could not be capable of provide passenger automotive tyres until the federal government eases import restrictions. That is anticipated to additional support the enterprise of native tyre makers reminiscent of Ceat.
The corporate recorded its highest-ever income throughout the December quarter and expects the momentum to proceed into the subsequent two quarters.
“Covid-19 is finished and dusted when it comes to saying ‘we’re going again to pre-Covid-19 ranges’. This quarter (Q3) has been our highest ever when it comes to income and the identical was true within the earlier quarter as effectively, and that too in an setting the place the brand new business car market is depressed,” Goenka mentioned.
Industrial autos gross sales, which had been depressed even earlier than the outbreak, have but to bounce again.