Executive Director - Operations, CEAT LimitedCEAT has expanded its Nashik plant. The Halol radial project is in the ramp up phase. Plans are underway to shift the Mumbai plant to Ambarnath. The company also clocked the highest net sales and operational profit at Rs 2783 and Rs 230 crore (YTD Feb'10) respectively. What influence are these developments expected to have on the future of CEAT Tyres?CEAT is entering into a high growth phase which would not only enhance The company's market share, but would also substantially alter CEAT's product and market mix. We are going to increase our shares in the relatively high growth and higher margin segments.What is the capacity of the Mumbai plant, and what are the products made at this facility?Our plant at Bhandup produces to the extent of 250 tpd. It primarily makes truck tyres and speciality tyres (OTRs, farm, etc).What is the capacity at Nashik plant post expansion, and what are the products made here?Nashik plant capacity, after expansion has gone to 200 tpd. We make light truck tyres, farm tyres, and some passenger radials at Nashik.Also, what are the products made at the Rs 700 crore Halol facility?Halol is our Greenfield venture, which will produce passenger radials as well as truck radials. It is a new generation plant in terms of equipments, automation levels and human resource practices.Is the Halol unit the most technologically advanced? If yes, then what are the technological highlights of this unit? It is a very modern plant with a very high degree of automation and process controls. The capability to deliver quality products at very narrow tolerance levels is significant at Halol. It is also backed by a state of the art R&D facility.CEAT has a JV in Sri Lanka? How does it contribute to the company's earnings and total capacity? CEAT Sri Lanka is the market leader in Sri Lanka. We have a 50% stake in this joint venture and CEAT India gains from this JV in many ways. We can import finished goods duty free, we also get dividends on its profits as well as a royalty fee.What are the products made at this facility, and what is the company's market share in that market? There are three small plants in Sri Lanka. We make bias truck, light truck, farm tyres as well as passenger radial tyres in Sri Lanka.CEAT has invested in a R&D centre at Halol? How significant is technology and R&D to tyre manufacture?With rapid pace of radialisation on cards, R&D is going to be more important than ever before. As the tyre industry matures, high level of customisation is required to be able to cater to specific needs of chosen applications and segments. This requires a strong R&D set up. Is the Halol R&D centre the first such facility by the company? No, CEAT has an R&D set up at Bhandup. The Halol facility is bigger and more contemporary. What percentage of the revenue goes to R&D?We are stepping up R&D spendings, and it will significantly increase in the coming months.How is CEAT meeting the challenge of costs, competition and imports? CEAT is continuously trying to improve the productivity and optimise costs at its two plants at Bhandup and Nashik. The new plant at Halol will further bring down the weighted average cost structure. CEAT is also investing heavily in strengthening its brand in various product categories. It is positioning its portfolio sharply at select target groups to gain substantial shares in such segments. What influence do you foresee with BIS/ISI mark being made mandatory for tyre sellers and manufacturers? All manufacturers will have to conform to BIS standards. That sets the bar at a certain level as far as quality is concerned and would act as a safeguard on behalf of customers. Fly-by-night operators will find it difficult to comply to BIS standards.CEAT has a wide product spread that also involves off-highway, industrial equipment tyres and two wheeler tyres. In terms of earnings, which of these markets has the biggest share?In India, commercial tyres comprise about two thirds of the market unlike developed nations where passenger car/bike tyres comprise about 60% of the market. With growth in infrastructure and more money in the hands of the youth, this is set to change in the coming years in India, as well. CEAT's investment strategy is geared to take advantage of these trends.Competition in the passenger vehicles, two-wheeler and commercial vehicle space is fierce. What are CEAT's plans for these market segments?Investment in the brand to keep it youthful and premium. We are trying to connect to our target groups in relevant ways through insights from their lives, which are uniquely Indian. How much of CEAT's production goes to OE manufacturers, and if you could name a few OE customers?About 10%-15% of our production goes to OE manufacturers. Maruti, Tata, JCB, Hero Honda, Piaggio, VE, M&M, Suzuki are some of our esteemed OEM customers.In percentage terms, how much of CEAT's production is exported. Which are the exports market that the company caters to? We export to more than 100 countries, and nearly 15% of our sales are from exports.Prices of rubber have been rising. What are the effects of this that you estimate for the near future? There will be pressure on margins in the near future. We are not contemplating any price hikes immediately. We shall rely on cost optimisation and product/market mix improvements to mitigate this to a certain extent, n
The Lubrizol Corporation has opened a new regional Applications and Business Centre in Mumbai to support its Advanced Materials business segment. Eric Schnur, president, Lubrizol Advanced Materials, presided over the opening ceremony, which was attended by customers and other VIP invitees.The location, in the newly built Jaswanti Landmark office complex in Mumbai, centres on a world class development and applications laboratory and also includes office space for commercial, technical and administrative talent. The laboratory includes development, formulation and applications testing capabilities in multiple personal care and coatings applications as well as a world-class pharmaceutical application development centre. The site also supports Lubrizol's business in engineered polymers, which is well known in India for its FlowGuardÃ‚Â® brand - a high performance engineered plastic widely used for hot and cold water delivery. EstaneÃ‚Â® thermoplastic polyurethane (TPU) is also a leading brand that has found acceptance globally in many applications including the transportation and sports shoe arenas. "Lubrizol has a long history of investing in the South Asian market, particularly in India," said Schnur. "We view this market as a great opportunity for Lubrizol Advanced Materials, and our new site represents an important step in what we intend to be a long-term effort focused on growth and investment in this region." At present, Lubrizol Advanced Materials has one manufacturing facility in India located in Vadodara. This facility provides global supply of naturally derived thickeners used in the personal care market. Lubrizol also has a joint venture with Indian Oil and operates a facility in Turbhe for the production of additives vital to the formulation of engine and driveline lubricants. Lubrizol continues their investment in support of the strategy to shorten supply lines to the customer, as well as offer the opportunity to customise products for the local market.