JK Tyre to set up a Rs 1,500-cr plant

Tyre major JK Tyre today announced an investment of Rs 1,500 crore to set up a radial tyre...

Tyre major JK Tyre today announced an investment of Rs 1,500 crore to set up a radial tyre manufacturing unit near here with a capacity to produce 56 lakh tyres annually.

8220;We signed a Memorandum of Understanding with the Tamil Nadu Government today for this purpose. With 50 lakh car tyres and six lakh bus and truck radial tyres,our annual domestic capacity will reach 1.55 crore,8221; JK Tyres and Industries Limited Vice-Chairman and Managing Director Raghupati Singhania told reporters here.

The plant to be set up in the industrial hub of Sriperumbudur would start production by the end of 2011 and full supply of radial tyres from the new plant would start in 2012.

He said the proposed plant was environment friendly,equipped with technology that will among others,ensure zero carbon leakage and maximise use of natural resources.

8220;We are looking forward to this venture and the state government has helped us with concessions in areas like sales tax,8221; he said in response to a query.

Earlier in the day,the company signed the MoU for setting up the plant in the presence of Chief Minister M Karunanidhi and his Deputy MK Stalin,who holds the Industries portfolio.

The plant would employ 1,000 high-end skilled labourers and Tamil Nadu was chosen for the company8217;s expansion in view of it emerging status as an auto hub and the firm8217;s existing presence in Karnataka,Singhania said.

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The company,he said,had invested Rs 500 crore on expansion activities in the last few years,adding it would soon come out with 8220;India8217;s first 3.5 tonne 57 inch ultra-large size tyre to be used in Off The Road OTR earth-moving equipment.8221;

Asked how the company chose to invest in the state where its major rival,MRF Tyres,was well entrenched,Singhania said location was not the issue. 8220;It does not matter. We see Tamil Nadu as an emerging auto hub,8221; he said.

Responding to a query on recent strikes by workers including those at Hyundai and Nokia,he said 8220;they certainly concern us. In fact that there is a bit of labour upsurge across the country. That8217;s part of the game and we should take it as it comes. But it all depends on the relations with employees,8221; he added.

On industry trends,he said it was facing a 8220;big squeeze8221; in view of the rising raw material prices. Besides,the requests for sops,including duty-free import of rubber up to a certain ceiling,had not been considered.

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To a question on the company staying away from the two-wheeler tyre market,he said 8220;there is a temptation8221; to invest in that sector,but it was staying away from doing so.

Demand for tyres in the country was growing riding on the growth in the auto industry and the share of radial tyres in cars and trucks and buses was expected to go up,he added.