CEAT to develop local industry: Save Rs.11Bn in foreign exchange via import substitution

CEAT

Aug 18, 2020 (LBO) – CEAT Kelani Holdings has announced that in response to the Government’s policies to develop domestic industry, it has stepped up capacity utilisation across all its manufacturing plants to supply the full domestic requirement of truck and bus tyres, thereby helping to conserve much-needed foreign currency for the country.

Rising to the challenge of the temporary import restrictions in place, the Company which already manufactures the majority of Sri Lanka’s tyre requirements said it could supply 100 per cent of the passenger bus and goods transport sectors’ tyre needs through domestic production.

This would represent a saving of Rs 11 billion a year in foreign exchange through import substitution, the Company said.

“The role of local industry is primarily to supply domestic needs and export surplus production, which CEAT Kelani Holdings has done very successfully for many years,” the Company’s Managing Director Mr Ravi Dadlani said. “We have periodically invested in expanding capacity and product range and now export to 16 countries. However, although we can supply 100% of the Truck and Bus tyre requirement with current production, we also have the option if the need arises, to shift some of our export volumes of markets that have not yet opened up to cater to the domestic market and support the government’s effort to reduce foreign exchange outflows.”

Elaborating on the Company’s capacity to meet additional domestic demand created by the restriction of imports, Mr Dadlani disclosed that CEAT Kelani can currently produce two million tyres annually in many categories with an imminent addition within next few of weeks of a further 200,000 Car and Van Radial tyres since new machinery is being installed pending the arrival of foreign technologists to commission the new capacity.

“It is also our opinion that in many applications it is cost-beneficial and a viable alternative to replace imported 10.00 R20 Radial Truck and Bus tyres with locally produced 10.00-20 Heavy Duty 18 PR Bias-ply tyres,” Mr Dadlani said, pointing out that with its ability to be re-treaded multiple times in a lifespan due to its robust heavy duty nylon construction, users can enjoy a lower cost per km from CEAT Truck and Bus tyres. He said this alternative, in addition to saving much-needed foreign exchange to the country, would also support the local tyre re-treading industry which currently is in need of more good quality nylon tyre casings for its growth.

Truck Bus tyres that fit 20-inch rims are among those that have been categorised as restricted for import at present, along with Car radial tyres that fit rims of 12, 13 and 14 inches.

CEAT Kelani has also announced that it has kept the prices of its tyres unchanged since December 2019 to support customers and the economy.

In July the Company launched ‘CEAT LYFMAX’ – a heavy-duty 10.00 R-20 size Bias-ply tyre for trucks, engineered and built specifically for users who consider heavy load-carrying capability with higher mileage a priority. Each tyre weighs a solid 52kgs (115 pounds) and has been extensively tested and benchmarked against two of the top imported brands attributed with load-carrying credentials in the local market.

CEAT Kelani Holdings is considered one of the most successful India – Sri Lanka joint ventures in the manufacturing sector. The joint venture’s cumulative investment in Sri Lanka to date totals Rs 8 billion, inclusive of Rs 3 billion committed in January 2018 for expansion of volumes, technology upgrades and new product development. The company’s manufacturing operations in Sri Lanka encompass pneumatic tyres in the radial (passenger cars, vans and SUVs), commercial (Bias-ply and radial), motorcycle, three-wheeler and agricultural vehicle segments.