Indian tyre companies eye investments here
INVESTMENT: Several Indian tyre manufacturing companies are keen to
invest in Sri Lanka, Secretary General, Automotive Tyre Manufacturers'
Association, Rajiv Budhraja told the Daily News after attending the
SAARC academy at the Mahaweli Reach Hotel in Kandy last week. He said
the main attraction is the availability of raw materials in Sri Lanka.
He said that though India is a large country, Indian tyre
manufacturers still need natural rubber to manufacture tyres. "The
Indian manufacturers are very happy with the Lankan natural rubber
market which is of high quality," he said.
Two Indian tyre manufacturers are keen to invest around US $ 20
million each and would be meeting with Board of Investment officials
soon to discuss investment plans.
The positive investor climate, the FTA between India and Sri Lanka
and the incentives provided to foreign investors are some of the other
key factors that are attracting Indian tyre manufacturers. Budhraja said
that while the sales of cars are annually increasing by around 35
percent, the heavy vehicle market too is growing at around 15 percent.
While the three wheel market is almost beaten up, the two wheel
market is growing by nearly 30 percent. "This has created a great demand
for tyres," he said.
All SAARC countries are investing heavily on infrastructure
development which includes new highways and widening of roads.
This will result in increase of automobile sales and the end result
would be the increased demand for tyres. He said that since
geographically Sri Lanka is closer to India it is profitable to
manufacture and export to the Tamil Nadu market. In addition Sri Lanka
can also service the Karnataka and Andra Pradesh markets as well. "This
is a very big and growing market," he said.
In addition to the Indian and Lanka markets they are also keen to
export to the African market.
There are eight leading tyre manufacturers in India which include MRF,
CEAT, Good Year, JK, Apollo and Birla which supply to 85 percent of the
country. In addition there are 25 leading small time tyre manufacturers.