New Delhi - JK Tyre & Industries Ltd. is buying a tire and tube plant in Haridwar, India, from Kesoram Industries Ltd. for about €300 million.
The factory in question, in Laksar-Haridwar, Uttaranchal Province, opened in 2009 and is rated at 4.4 million truck and two-wheeler tires per year.
Kesoram’s decision to buy comes just nine weeks after the firm called published reports on the pending sale “speculative and misleading.”
Despite the sale of its Birla Tyres most modern plant, Kesoram “remains strongly committed to its presence” in the tire business, the Kolkata-based diversified company said without elaborating.
Birla has one other plant, a 24-year-old unit in Balasore that has capacity for passenger, light and medium truck, agricultural and OTR tires.
Birla Tyres reported $506.5 million (€443 million) in sales for the fiscal year ended March 31, 2014. Sales for the first nine months of fiscal 2015 were down 11 percent, according to Kesoram figures.
Kesoram said it the transaction will strengthen its balance sheet, as proceeds will be used to reduce debts.
The move follows by several weeks JK Tyre’s announcement that it’s planning to enter the two- and three-wheeler market. The plant in Laksar has capacity for two-wheeler tires.