JK Tyre and Industries has firmed up plans to invest an additional Rs 5,000 crore over the next 5-6 years to expand its production capacity, which would also include setting up some dedicated lines for export markets.
The company is currently in the midst of an investment cycle of Rs 4000 crore, which started 4 years back and is set to close next quarter. JK Tyre & Industries Chairman & Managing Director (CMD) Raghupati Singhania said the fresh resources will be utilised to increase production capacity for both car and truck tyres.
“For the next 5-6 years, we are now planning for another Rs 5,000 crore investment to enhance our capacities, both for car as well as truck tyres. We also feel that going forward India could have a good opportunity in the global markets, we want to utilise this opportunity," Singhania added.
JK Tyre registers about 14% of its overall revenues from exports, at present. The company exports tyres to around 110 markets globally.
With high tariffs in the US impacting business, JK Tyre is focusing on adding new export markets. Singhania informed, “Exports from India are naturally getting restricted (to the US), because with the 50% duty. I hope that some kind of a bilateral trade agreement (with the US) will culminate in successful outcomes. So that will help, but this (resolution) is still a question mark.”
Meanwhile, the company has revised its export strategy. “We have diverted our exports from India to other markets...there is a demand and we are diverting shipments to other countries..also we are diverting a lot of exports to the US from our plant in Mexico," Singhania said, adding, in the long-term, if tariffs remain high then Indian tyre exports to the US will certainly be impacted.
As regards local sales, post the GST recast Singhania said he expects the industry to grow in the range of 5-7% this year, with JK Tyre expected to perform slightly better. “In the long term, the GST 2.0 will also help in generating demand even in the rural sector because of the affordability factor," he said.
Singhania said that the revival in demand for small cars will help spur growth in the domestic tyre industry, as overall volumes would go up.
The company is currently in the midst of an investment cycle of Rs 4000 crore, which started 4 years back and is set to close next quarter. JK Tyre & Industries Chairman & Managing Director (CMD) Raghupati Singhania said the fresh resources will be utilised to increase production capacity for both car and truck tyres.
“For the next 5-6 years, we are now planning for another Rs 5,000 crore investment to enhance our capacities, both for car as well as truck tyres. We also feel that going forward India could have a good opportunity in the global markets, we want to utilise this opportunity," Singhania added.
JK Tyre registers about 14% of its overall revenues from exports, at present. The company exports tyres to around 110 markets globally.
With high tariffs in the US impacting business, JK Tyre is focusing on adding new export markets. Singhania informed, “Exports from India are naturally getting restricted (to the US), because with the 50% duty. I hope that some kind of a bilateral trade agreement (with the US) will culminate in successful outcomes. So that will help, but this (resolution) is still a question mark.”
Meanwhile, the company has revised its export strategy. “We have diverted our exports from India to other markets...there is a demand and we are diverting shipments to other countries..also we are diverting a lot of exports to the US from our plant in Mexico," Singhania said, adding, in the long-term, if tariffs remain high then Indian tyre exports to the US will certainly be impacted.
As regards local sales, post the GST recast Singhania said he expects the industry to grow in the range of 5-7% this year, with JK Tyre expected to perform slightly better. “In the long term, the GST 2.0 will also help in generating demand even in the rural sector because of the affordability factor," he said.
Singhania said that the revival in demand for small cars will help spur growth in the domestic tyre industry, as overall volumes would go up.
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