(Lanka Business Online report)
Colombo – Sri Lanka's CEAT Kelani, a joint venture between CEAT India and Kelani Tyres Sri Lanka, said it commissioned a radial tire plant which has boosted capacity by 70 percent to 450,000 a year.
The radial tires are targeted at passenger cars and sports utility vehicles.
The firm said it could substitute more than 60 percent of the country's imports in the category.
Sri Lanka's rulers recently raised taxes on imported tires and under tax protection citizens are forced to pay “higher-than-world” prices for a product.
Autarky has been promoted in Sri Lanka partly due to so-called 'foreign exchange shortages' which is a result of the nation's soft-pegged exchange rate, established after 1951.
The firm said it would also export products. It was already exporting a third of its output.
Chanaka De Silva, chairman of Kelani Tyres PLC, said that following the end of Sri Lanka’s 30-year war, there were more incentives for companies to grow.
"The new radial tire production facility that has just been declared open is only part of this commitment," he said after the new factory was opened by economic development minister Basil Rajapaksa.
N C Venugopal, managing director/CEO of CEAT Kelani Holdings said the new plant had the latest technology including a bead apexing machine, cap ply and cap strip machine and improved tire building machines and curing presses.
In terms of current export markets, future plans and De Silva's comment about "commitment", ERJ spoke with Ravi Dadlani, vice president sales and marketing, today (16 June).
"We currently export a third of our production to approximately 17 countries with nearly 15% of this being to India, while the rest go to markets in Egypt, Nigeria, Jordan, Yemen, Pakistan, Nepal, Bangladesh, Dubai, Singapore, Ghana, Laos, Syria, Philippines, Malawi, Saudi Arabia, Oman, Mauritius, etc.," Dadlani said.
"We also have plans with this new facility to move in to markets such as Brazil, Mexico and Panama, while increasing the range of available sizes in the current markets that we operate in."
"This our fourth factory on the island and since the cessation of hostilities we have committed Rs 2.5 billion SLR [€14.2bn] as investment in Sri Lanka of which the major part is nearly over with approximately Rs 400 million more to happen.
"The chairman's statement was in reference to our plans that are being contemplated on the setting up of a state-of-the-art TBR [truck and bus radial] plant with an investment of Rs 6 to 6.5 billion SLR going forward."