Ceat Leaves Rhino Behind. Sri Lanka Cricket Captain Kumar Sangakkara as Brand Change Envoy for New Logo. Production to Go Up 20pct

18th January 2011, www.lankabusinessonline.com

CEAT Sri Lanka, a unit of India's RPG Industries said it will invest up to 500 million rupees to expand production 20 percent this year amid strong sales growth over two years and plans to enter European and Latin American markets.

In the year to March 2010 revenues had grown to 5.5 billion rupees from 4.7 billion despite an economic downturn, and revenues were growing above 20 percent in the current year.

CEAT Sri Lanka managing director Randeep Narang said the firm was now making about 150,000 tyres a month, up from about 125,000 a year earlier.

In the year to March 2010 exports had grown 96 percent and the volumes were being maintained this year, he said.

"We want to expand production by 20 percent for exports and the domestic market," Narang said.

"This year itself we will invest 400 to 500 million rupees."

About 35 percent of the production is exported to around 20 countries including India. Last year the firm had entered new markets like Egypt, Syria, Cambodia, Nigeria, Singapore, Dubai and Vietnam.

CEAT Sri Lanka is a 50/50 joint venture between India's CEAT and Sri Lanka's Kelani Tyres a listed firm.

Last year CEAT bought the full rights global rights to its brand from Pirelli.

"We are now looking at entering European and Latin American markets," Narang said.

The firm's new logo will be marketed with the help of Sri Lanka cricket captain Kumar Sangakkara, who will be the 'CEAT brand change envoy'. Narang said the cricketer shared the brands new values of being youthful, energetic and international.

In the domestic market, Narang said the firm had top slot in truck and light truck tyres with a 59 percent share, in three wheelers 39 percent and in radial tyres 18 percent.

It was number two in the two wheeler market.

A big challenge for the firm was, rising commodity prices, triggered by money printing by the US Federal Reserve.

The Fed had come under renewed fire from economists for its 'quantity easing exercise' which is pushing up food, base metals, precious metals, and other commodities up.

The firm said it was containing costs by improving productivity. Six weeks ago it had taken a 4.0 percent price increase but costs had risen 12 percent, head of Sri Lanka sales Ravi Dadlani said.