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.

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.