Ceat, who have been outsourcing its two wheeler tyre manufacturing to a Hyderabad based company has decided to start making the tyres themselves.
Ceat will invest INR 1,200 crore over four years to create a manufacturing plant with a capacity to produce 30 lakh tyres per month.
The construction of the new plant will be carried out in three phases. The first one, which will have a capacity to produce 12 lakh tyres a month will be operational by April 2016.
Phase one will have an investment of INR 400 crore and the foundation stone for this plant was laid by Devendra Fadnavis, the Chief Minister of Maharashtra.
On completing all three phases of this new factory, Ceat's new plant will generate job opportunity and employment for up to 1,100 people.
Apart from this investment in Butibori, the company will ramp up production in its other facilities as well. The plant at Halol will have an investment of INR 650 crore and the factory in Bangladesh will have an investment of INR 300 crore.
Although car sales have been sluggish, which has affected Original Equipment Manufacturers (OEM) suppliers, Ceat was not affected much because only 30 percent of Ceat's tyres go towards the OEM market. The remaining is supplied to the replacement market, which has remained unaffected.
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