Opportunity Sri Lanka | » Sri Lanka’s CEAT Kelani Holdings increases radial production by 72,000 exceeding half a million tyres per year
Sri Lanka’s CEAT Kelani Holdings increases radial production by 72,000 exceeding half a million tyres per year

Sri Lanka’s CEAT Kelani Holdings increases radial production by 72,000 exceeding half a million tyres per year

Sri Lanka’s CEAT Kelani Holdings has reportedly announced that it had increased production of Passenger Car Radial (PCR/van) tyres by 72,000 tyres a year, adding 16% to its annual capacity in this category, as part of its expansion plan to support Government efforts to conserve foreign exchange through domestic production, according to local media reports.
According to reports, the first phase of the planned expansion of PCR tyre production in 2021 is the result of the commissioning of two new tyre presses at CEAT’s manufacturing complex in Kelaniya.
The new presses are the first hydraulic tyre presses installed at CEAT’s manufacturing facilities in Sri Lanka and come at a 45% premium over their mechanical counterpart, the Company has reportedly stated, disclosing that this upgrade in technology will significantly improve the uniformity of the tyre, the ride and handling parameters and the overall aesthetics of the passenger car radial tyres coming off these presses.
The expansion is expected to see CEAT-Kelani’s total car and van tyre production capacity increasing up to 500,000 tyres per annum in some of the most popular tyre sizes for rim sizes ranging from 12 to 14, that fit vehicles such as Maruti 800, Suzuki Alto, Estilo, Omni, Swift and Liana, Mahindra Maximo, Nissan Sunny FB15, FB14, N16, March, Bluebird and AD Wagon, Toyota 110, 121, Vios, Soluna, Starlet and Carina, Honda Civic, Hyundai Accent, Perodua (VIVA Elite) and Cherry QQ. Local demand for these tyres is rising, especially in the backdrop of the temporary import restrictions imposed by the Government.

The next phase of CEAT Kelani’s expansion is expected to take place immediately with the addition of two more tyre presses and a tyre building machine, whereby capacity is envisaged to increase by a further 100,000 radial tyres per annum, the company said.
Commenting on these developments, CEAT Kelani Managing Director Ravi Dadlani has been quoted as saying, “Our focus in the past one year has predominantly been on strategically ramping up production in specific tyre categories and sizes to cater to market needs and support the national effort to reduce dependence on imports. The travel restrictions necessitated by the pandemic delayed the commissioning of some of the new machines imported for the purpose, but additional radial production is now coming on line and feeding the market.”

CEAT Kelani Holdings increased capacity utilisation across all its manufacturing plants last year, to supply to the domestic requirement of truck, bus, three-wheeler, car, and van tyres with the objective of catering to the demand in the local market in the absence of imports.
In August last year, the company, which was already manufacturing about half of Sri Lanka’s tyre requirements, had stated that it had increased production to supply 100% of the passenger bus and goods transport sectors’ tyre needs through domestic production. It estimated that this would save Sri Lanka Rs. 11 billion a year in foreign exchange.
Furthermore, CEAT Kelani has further announced the achievement of an 85% increase in the production of tyres for the ‘two-wheeler’ segment over just three months between June and September 2020. Media reports further stated that CEAT Kelani Holdings is considered one of the most successful India-Sri Lanka joint ventures in the manufacturing sector. The joint venture’s cumulative investment in Sri Lanka to date totals Rs. 8 billion, inclusive of Rs. 3 billion committed in January 2018 for expansion of volumes, technology upgrades and new product development.

OSL take:

The increase in production by CEAT Kelani Holdings is indicative of the growing business potential in Sri Lanka as well as the success of joint business ventures in Sri Lanka. The country’s economy has been resilient through the years and is already showing strong signs of returning to normalcy after facing the impact of the global Covid 19 pandemic. The resumption of economic activities post Covid 19 lockdown has expanded business/investment opportunities in Sri Lanka. Also, the island is fast becoming a business hub in the South Asian region given its geographical positioning in the Indian Ocean region and the many trade agreements as well as trade concessions enjoyed by the country. Foreign businesses/investors could therefore explore opportunities in Sri Lanka as well as look at forming joint ventures/partnerships with local business entities.

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Article Code : VBS/AT/25032021/Z_2

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