JK Tyre and Industries is looking for expansion plans in South East Asia and is planning for acquisitions to grow beyond domestic shores to capitalise on global growth opportunities, ET states. The company has encountered some interesting propositions for possible opportunities of acquisition to catapult into a global entity.
In 2008, JK Tyre & Industries had bought the privately-held Mexican tyre company Tornel for R270 Cr in its first overseas acquisition through which it gained access to North American markets through a range of free trade agreements (FTAs) that Mexico had with these countries.
The company is seen to be considering greenfield manufacturing base in many emerging markets of South-East Asia that have posted some strong growth in recent years. The company currently has nine plants across India and Mexico with an annual capacity of around 20 million tyres.
In addition to Mexico, to meet the increasing demand for the tyres in the discerning global tyre markets, the company have entered into sourcing arrangements with tyre companies in China Vietnam and Sri Lanka for various products including Truck Radial tyres and Bias Truck / Bus and LCV tyres.
JK Tyre has markets across six continents with six plants in India and three in Mexico. Its total capacity is 2.65 lakh tonnes. Its six modern plants in India are located at Karnataka (3), Madhya Pradesh, Rajasthan, Tamil Nadu
On the other side, it is also moving ahead with its domestic expansion plans with a capex investment of around R1000 Cr to double its truck & bus radial as well as passenger car radial capacity at the Chennai plant.
The Indian tyre production is expected to reach almost 20 Cr units by 2016-17. Currently India has 40 listed tyre manufacturing companies, out of which the top 10 account for over 96 % of the country’s total tyre production. The tyre export market in India is valued at R3600 Cr.
In this space, TVS Automobile Solutions Limited had formed a JV with the U.S based Myers Tire Supply International Inc to promote both the Myers range of products and TVS ASL’s tools and equipment business in India
