Ceat commits to invest $170m in Sri Lanka tire operations

Colombo – Ceat OHT Lanka (Private) Ltd has signed an agreement with the board of investment of Sri Lanka (BOI) for a $171 million (€147 million) investment in the country’s off-highway tire sector.

In a 25 Aug statement, the BOI said the deal was among the “largest recent investments” from India into Sri Lanka, but did not provide further details about the project.

The investment follows Ceat’s acquisition of Michelin’s construction compact line business, including a factory in Midigama and a casting product plant in Kotugoda (ERJ report).

The acquisition, the closing of which is still underway, gives Ceat global ownership of the Camso brand, to be permanently assigned after a three-year licensing period.

According to the BOI, the agreement “strengthens Sri Lanka’s profile as a global hub for off-highway tires,” and positions the country as a competitive centre for export-led growth.

A tripartite memorandum of understanding was also signed between Ceat OHT Lanka, Michelin Lanka, and the Inter-Company Employees Union (ICEU).

The MoU guarantees job security for around 1,483 employees, ensuring “full retention of past service, seniority, salaries and benefits” and “no retrenchments” during the transition.

According to Amit Tolani, chief executive of Ceat Speciality, the deal with BOI marks “a new chapter” in the company’s presence in Sri Lanka and will play “a central role” in its future growth.

“Our immediate priority is ensuring a seamless transition while safeguarding jobs,” said Kumar Subbiah, Ceat CFO.

The investment “reaffirms Ceat’s long-term commitment to our employees and to building Sri Lanka as a world-class hub for OHT [off-highway tire] manufacturing and exports.”