CEAT charts expansion plans for international market

By SiliconIndia   |   Tuesday, 30 November 2010, 06:37 Hrs
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Bangalore: The country's fourth biggest tyre producer and Bangalore based 'CEAT' is charting expansion 'to make its presence felt in European and Latin American countries as U.S. is known to have the world's biggest tyre market. CEAT's top official opined that the company would expand well in the international market once its new 630 crore radial tyre factory at Halol, Gujarat, comes on stream in the year's last quarter.

Geared up to produce 3, 00,000 passenger car radials, the Halol plant also produces 40,000 truck and bus radials every month. CEAT has outsourced 25-30 percent of its production in the country. Anant Goenka, Deputy Managing Director, CEAT, said: "We have set up offices in Europe; likewise, we can have them in the US. We are also exploring the possibility of outsourcing manufacturing, which could be in China, Vietnam or Thailand, for they bring in better technology and lower investment."

"We will look at the US market once our Halol unit is brought on stream. The US is a highly radialised market. We do supply cross-ply tyres to that market but at a very small scale," he added.

With the present production of 580 tonnes per day being exported which is 15-20 percent of the company's production and Halol facility adding 150 tonnes a day, the company hopes to double its exports to Rs1,000 crore over the next three years.

Anant Goenka had also stated that the acquisition is strategically important to them as it is the main brand of the company and it allows them to market in whichever market they choose.

For the value of 9million, CEAT brand has been acquired by the CEAT company from Pirelli and C Spa who owned CEAT brand wherein KPMG had done the valuation. Pirelli will continue to hold exclusive licences to use the CEAT brand in Europe, Latin America, Turkey and Mexico till December 31, 2011. The deal also includes a non-exclusive license to Pirelli to market and sell the CEAT brand till December 31, 2012. The transaction thus, has proved to be a boon for CEAT to have control in markets wherever Pirelli owns the CEAT trademark that mostly covers the European countries.

'Altura' is the name of the brand under which CEAT exports currently to Europe and South America and it plans to retain the name as half of its exports are done under Altura brand. This has developed a strong customer base.

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