CEAT, Sri Lanka - India Tyre Venture's Exports Go Up

26th August 2010, www.lankabusinessonline.com

Sri Lanka's CEAT-Kelani, a joint venture tyre firm with India's CEAT group said exports rose in the second half of the year ending March 2010 and exports were up to India and other countries. Kelani was a former privatized state tyre maker, which was heavily protected from imports and was dogged with labour unrest.

Though protection is still there, (protection pushes up the cost of tyres in the domestic market forcing consumers to pay more and fatten the profits of businesses) the firm had contained costs after joining hands with India's CEAT in 1999.

The firm said average annual production has now increased to 12,800 metric tonnes compared to 7,400 in the 1999-2002 period.

The firm was now exporting to India under the Indo Lanka free trade deal and also to Eqypt, Nigeria and Dubai after investing to improve costs.

The firm had invested in new technology and pushed up labour productivity and the firm also started making radial tyres.

Chairman Chanaka de Silva said rising production had brought down the cost of converting raw material to finished products even below the levels seen at CEAT's plant in India.

It was adding 200 metric tonnes a month of capacity to make bias ply tyres by October 2010.

In the year to March 2010 the group had made 209 million rupees in profits, up from 40.6 million rupees as demand recovered. Revenues rose to 2.7 billion rupees from 2.1 billion rupees.