The presence of vehicle makers and port connectivity make the state the perfect choice.
Last month, TN Chief Minister Edappadi Palaniswami inaugurated CEAT Tyres’ new manufacturing unit near Sriperumbudur.
It will be CEAT’s sixth factory in India and is expected to help the company serve incremental orders in the car and two- wheeler tyres. An investment of Rs.4000 crore is planned for the Chennai operations over a period. The plant will initially employ about 350 people, but with the next levels of capacity expansion planned, it is expected to create jobs for about 1000.
CEAT’s overall capacity is about 1000 tonnes a day now; with the Chennai unit, the total capacity of the company will touch 1250 tonnes a day. CEAT has now joined the list of leading tyre makers that have set up shops in TN. The state already has production units of Apollo Tyres, JK Tyres, Michelin Tyres and Alliance Tire Group in addition to state-headquartered MRF and
TVS Tyres.
Chennai, the auto hub
Being an auto manufacturing hub, Chennai has already become a tyre production hub in the country. The state is estimated to account for about 40 per cent of tyre production in India.
For Apollo Tyres, its Oragadam operations are amongst the largest tyre production centres. Chennai is its fourth factory in India accounting for 47 per cent of the company’s installed capacity in India. The company has pumped in more than Rs 4000 crore in its Chennai operations. This factory produces truck and bus radial tyres as well as passenger car radials. Apollo Tyres has also moved its Advanced Engineering Centre last year from Bengaluru to its R&D centre in Chennai. This has helped the department to work in proximity to the Chennai plant for several process automation activities.
JK Tyres Chennai unit was commissioned in 2012 and the company so far has invested more than Rs 3000 crore. Its Chennai factory is one of the largest units of the company and it produces truck and bus radial tyres.
French tyre major Michelin has so far invested more than Rs 3500 crore in a unit near Chennai and the factory is one of the most advanced production units globally with a production capacity of 30,000 tonne a year.
Alliance Tire Group (ATG), engaged in the manufacture of off-highway tyres, owned by Japan’s Yokohama, has been producing and selling tyres out of its Tirunelveli factory in southern Tamil Nadu.
MRF and TVS Srichakra Tyres have been producing a range of tyres out of their units in the state.
While tyre makers chose Chennai for setting up their units to be closer to the OEMs, the other advantages provided by Chennai include port connectivity and copious availability of a skilled workforce.
Bias tyres have been used in India for the past several decades. The Indian tyre market has been witnessing a shift towards radial tyres. While radial tyres have already become a norm in PVs, the CV segment after a slow start has seen rapid adoption to this in recent years.
Bias Tyres have been discarded by developed economies like the USA and Europe because radial tyres are superior to bias tyres in like-to-like applications but underperform when the vehicle is overloaded. Yet another benefit of the truck radial is that even after the tyre wears out, there is some extra rubber provided below the tread, which can be re-treaded, extending the life by up to 25 per cent.
Improving road conditions has helped accelerate the popularity of radial tyres. Radialisation in CVs has crossed 50 per cent. This rapidly changing preference has caused tyre manufacturers to set up new radial capacities.
Three ports nearby!
The availability of port facilities helps companies import the raw materials required for production. Tyre makers in and around Chennai have been able to import easily materials like synthetic rubber from Malaysia and other countries. Since most of the tyre makers also export a good share of their production through the three ports – Chennai, Ennore and Kattupalli, all located around the Chennai metro.
Anant Goenka, Managing Director, CEAT Tyres, said: “Tamil Nadu offers the unique benefit of having many automobile manufacturers, proximity to the port and a favourable labour environment.” – R Seetharan
