Mumbai: The RPG group-promoted Ceat Ltd is exploring possibilities to foray into the China and ASEAN countries as part of its overseas expansion. The company is in talks with various tyre-manufacturing companies in these countries to source tyres for marketing purposes.
Says Ceat chief manager Sandeep Gulati: "We are weighing options to foray into the Chinese and ASEAN markets. We are looking for potential partners to source tyres to cater to these markets. We want to replicate the model which we have worked out with Pirelli Tires in Italy in these two new markets."
The company's move assumes significance as leading tyre companies have identified China as an emerging hub to source tyres in the coming year as the production cost is comparatively low than any other countries in the world. JK Industries, the manufactures of JK tyres, has already tied up with two Chinese tyre manufactures to source tyres.
Similarly, Apollo Tyres is also planning to set up a manufacturing facility in China to tap the East Asian and European markets. The company has already started negotiations with leading players for collaborations for technology.
Senior Ceat officials say the company will invest Rs 250 crore to set up a unit to manufacture radial tyres for trucks. "The new unit will have the capacity to manufacture 50,000 to 60,000 tyres per month."
They say internationally the market is moving towards radials and the company expects the Indian market will also grow in that direction, especially with the proposed investment into the road sector, which is expected to bring in better roads.
The company has imported radial truck tyres from China to test the market, with the first consignment of 300 to 350 tyres coming in two months ago. The company manufactures radials for passenger cars and this capacity is expected to be ramped up from 35,000 to 1 lakh tyres per month.