CEAT Kelani Holdings can be considered as one of the most successful joint ventures between India and Sri Lanka in the manufacturing sector. The company’s investment in Sri Lanka to date is recorded at LKR 8 billion including the LKR 3 billion committed in January 2018 for company expansion.
As part of the company’s expansion strategy as a means of supporting the government effort to conserve foreign exchange through increased local production CEAT Kelani Holdings announced on the 23rd of March, 2021 that they plan on increasing production of Passenger Car Radial (PCR/Van) tyres by 72 000 tyres per year, bringing about a 16% increase to the annual capacity.
The recent increase in tyre production in 2021 was the result of the company installing 2 hydraulic tyre presses in its Kelaniya Manufacturing Plant. These will also be the first two hydraulic tyre presses installed in a CEAT manufacturing facility in Sri Lanka. The new presses come at a 45% premium over its mechanical counterpart. According to the company the upgrade in manufacturing technology will improve the tyre performance significantly.
The expansion allowed for the company to reach a total car and van tyre production capacity of over 500 000 tyres per year with the most popular tyre sizes being found in the range of 12 to 14. The local demand for tyres of vehicles such as Maruti 800 and Suzuki Alto saw an increase with the temporary import restrictions placed by the government.
The second phase of the expansion will see the company install 2 additional tyre presses and a tyre building machine. This proposed expansion will result in a further increase in capacity to 100 000 additional radial tyres per annum.
The company was recorded to have supplied half of Sri Lanka’s tyre requirements back in August 2020. It is said to have increase it supply of tyres to the passenger bus and goods transport sector by 100%. This venture is expected to save the country LKR 11 billion per year in foreign exchange.
Also the company noted a further 85% increase in the three wheeler tyre production between June and September 2020. Additionally CEAT has shown a gradual increase in the production of motorcycle tyres and this progressive increase is expected to save a further LKR 350 million.
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