In line with the pickup in business growth, tyre companies are likely to make significant increases in their capex plans in 2010-11, to expand capacity and meet product demand
A healthy pickup in demand from the auto sector in the face of a visible economic recovery is likely to help the country's tyre industry to clock a 7% to 8% growth in FY11, reports PTI.
Also, in line with the pickup in business growth, tyre companies are likely to make significant increases in their capital expenditure (capex) plans in 2010-11, to expand capacity and meet product demand, top players said on Tuesday.
"The Indian tyre industry may grow at around 7%-8% at Rs27,000 crore in the next financial year from Rs25,000 crore presently, on the back of high demand from the automobile sector," AS Mehta, director (marketing), JK Tyre & Industries, told PTI.
JK Tyres, which is one of the leading players in the domestic market, is targeting a growth of 20% in the next one year. It has chalked out an investment plan of Rs1,200 crore over the next two years to expand production in its car and truck radial segment.
"Year 2010 is going to be a happening year for us. We plan to invest Rs1,200 crore over the next two years to increase car and truck radial production in India," Mr Mehta said.
Echoing a similar view, another leading tyre manufacturer Ceat Ltd said that it has targeted a revenue of Rs3,500 core in the next financial year.
"The industry is likely to grow over 7% and we are expecting over Rs3,500 crore revenues next year from both the domestic and global markets," said Ceat's executive director for marketing, Anarb Banarjee.
Ceat plans to set up a new plant by spending over Rs650 crore in the next financial year, besides expanding its existing plant in Nashik, he said.
"We will invest over Rs650 crore in 2010 to set up a new plant and will expand our existing plant in Nashik. The new plant is likely to start operations by September 2010," Mr Banarjee said.
The company expects the demand in the domestic market to pick up in the New Year and was hopeful of achieving a rapid growth in its business.