CEAT profits increase five fold to Rs 532 m

CEAT Sri Lanka increased its profit after tax by more than five times to Rs 532 million, a whopping 419 per cent growth in the year ending March 31, 2010.

CEAT Sri Lanka also achieved a 25 percent increase in sales to Rs 5.4 billion by penetrating new export markets in a period where revenue from domestic sales grew by 10 percent, the company statement said.

In sharp contrast, export sales grew by a hefty 96 percent over the previous year. One of the most noteworthy achievements of 2009-10 was CEAT Sri Lanka's success in capturing new export markets and the development of new private brand customers.

This success has been carried into the current financial year, during which CEAT tyres made in Sri Lanka have penetrated markets like Egypt, Syria, Cambodia, Nigeria, Singapore, Dubai and Vietnam.

Production volumes grew by a noteworthy 31.6 per cent and factory costs were pruned by 25 per cent, enabling CEAT Sri Lanka to increase its operating profit to 17 per cent of net sales in a performance built on an amalgamation of manufacturing excellence, sales and marketing strategy and supply chain efficiency, the company's Managing Director Randeep Narang said.

Narang said: "The formation of cross-functional teams mandated to reduce waste and cost, structured weekly and monthly reviews involving staff at all levels, and routing all procurement through a newly created Central Procurement Cell were among the changes that contributed to our stellar results.This achievement of a five-fold growth in the bottom line at a time when the market did not grow, is entirely attributable to change management initiatives. The external environment did not contribute."

CEAT, India Tyre Sector - RPG Enterprises President Paras K. Chowdhary said the vision and dynamism of the new management team and the degree of innovation evident in the change management initiatives undertaken are clearly the drivers of growth achieved by our joint venture in Sri Lanka.

"The growth that our joint venture in Sri Lanka has achieved in very challenging circumstances is a case study on how businesses can beat the external environment through internal initiatives," he said.