Ceat to add off-road tire capacity as demand grows
25 Nov 2022
New investment in addition to ongoing expansion project at its site in Ambernath, India Mumbai, India -- Indian tire maker CEAT is further expanding its off-highway tire (OHT) production capacity in response to solid market demand for the products. Announcing its second quarter results, officials said CEAT is to invest INR3.95 billion (EUR46.5 million) to add 55 tonnes/day of radial OHT capacity at its Ambernath, India plant.
The facility has recently been upgraded to produce 80 tonnes/day of OHT and is currently undergoing another expansion project to raise capacity to 105 tonnes/day by mid-2024. Triggered by "demand situation", the tire maker said it is also converting 18 tonnes/day of bias truck tire capacity to OHT at another Indian facility in Bhandup. Once implemented, total OHT radial capacity will reach 160 tonnes/day, according to CEAT, without giving a target completion date.
The OHT category is "strategically important for us and we are confident of generating the desired earnings margin and ROCE from this capex," said managing director Anant Goenka. According to Goenka, sales in the US have been particularly strong and the company continues to be "optimistic" about OHT revenues in the region. In Europe, however, CEAT is expecting to see some headwinds, the MD further commented in the company's 8 Nov quarterly results briefing.
"We are seeing some stresses.
But we're being able to maintain our sales growth and maintain our own internal budgeted numbers," the CEAT boss noted.