JK Tyre to expandBy William Schertz, Senior Reporter
NEW DELHI (Aug. 31, 2009)—JK Tyre & Industries Ltd. is moving forward with plans to expand distribution of its tires in the U.S. and Canada, but the company—which acquired Mexico City-based Compania Hulera Tornel S.A. de C.V. in May 2008—has yet to disclose specifics of its new distribution partners.
JK Tyre has had a presence in North America since 1986, supplying bias-ply tires from India to the U.S. It also has supplied radial truck tires to the U.S. and Canada since 1999, according to Raghupati Singhania, vice chairman and managing director of JK Tyre.
He said the company will be ready to launch JK- and Tornel-brand radial passenger and light truck tires to U.S. and Canadian customers in six to 12 months.
Mr. Singhania said that the company chose to buy Tornel "because of its strategic location that facilitates expansion of JK Tyre's business in the Americas." JK plans to distribute both the JK and Tornel brands in radial passenger, light truck, farm and specialty tires to U.S. and Canadian customers, he said.
Since its takeover of Tornel, JK Tyre has upgraded its three Mexico plants in order to achieve "higher productivity and better efficiency levels," Mr. Singhania said. JK Tyre upgraded extruder lines, modified the manufacturing and curing process, improved power consumption and put in a gas pipeline to reduce steam cost.
In India, JK Tyre completed a radial truck tire capacity enhancement project at its Vikrant Tyres Ltd. plant in Mysore, Mr. Singhania said. It also plans to build a radial car tire facility at an as-yet undisclosed site in southern India with a capacity of 2.5 million tires per year in order to cope with increased demand for tires in India. The facility will cost $62 million and should be complete in 18 months.
The Vikrant project will double annual truck tire capacity to 800,000 units at a cost of about $65 million. JK plans to increase capacity by another 400,000 tires per year in a project to be completed in the next 18 months.
To meet growing demand for OTR tires in India, JK Tyre also has been increasing OTR capacity at the plant and has undertaken a $25 million expansion project to make ultra-large size tires by early 2010.
Mr. Singhania said export opportunities for OTR tires have prompted the company to plan another capacity expansion of 5,000 tires per year, at an estimated cost of $31 million. He did not provide a timeline as to when this project would be complete.
Mr. Singhania said JK Tyre will boost annual capacity for radial passenger tires 11.1 percent at its plant in Banmore, India, to 5 million tires. The project, which will be completed in December, will cost about $10.5 million, he said.
"This expansion is towards achieving higher market participation in the fast-growing car segment in India," he said. "All major players like GM, (Chrysler), Ford, Honda, Toyota (and) Suzuki are setting up their manufacturing facilities in India, and JK Tyre has already been supplying tires to many of these OEMs."
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