Daimler India's Bharat Benz trucks to roll on JK Tyres

The Economic Times (Chennai) - India's number three tyre manufacturer JK Tyre & Industries Ltd has bagged the order from Daimler India Commercial Vehicles Pvt Ltd to supply tyres for its Bharat Benz trucks, said a top company official.

"The latest original equipment manufacturer (OEM) client for us is Daimler India that will be rolling out trucks at its plant here," Raghupati Singhania, vice chairman and managing director, told reporters here Monday.

He, however, declined to comment on the order volume and whether JK Tyre is the sole tyre vendor for Daimler India's trucks to be branded as Bharat Benz.

According to JK Tyre officials, the Daimler India's order will be met by its Rs.972 crore plant here commissioned Sunday.

Daimler India is expected to launch its trucks sometime in themiddle of this year.

According to Singhania, the company supplies 14 percent of its truck tyres and 55 percent of its car tyres to OEMs and the balance in the replacement market.

The highly automated Chennai factory is JK Tyre's sixth plant in India and will have a workforce of around 450.

"The Chennai plant has a capacity to roll out 2.5 million passenger car radial tyres and 400,000 truck radial tyres. Ramping up the production in a gradual manner, we will reach full production in six months time," Singhania said.

He said the company's total car radial tyre capacity is now 7.5 million tyres and 1.4 million truck radial tyres per annum.

According to Singhania, the 100 acre Sriperumbudur plant would save the company freight cost - tyres and raw material cartage - as earlier JK Tyres had served the southern market from its plants in Karnataka and elsewhere in India.

Singhania said imports of car radial tyres is a major issue faced by the domestic manufacturers, and the government should levy anti-dumping duty on such tyres as it had done in the case of truck tyres sometime back.

He said nearly 40 percent of the passenger car radial tyre market is garnered by imported tyres, leaving the domestic companies with little pricing power.

"The pricing power is with the customer," Singhania said.

According to him, Chinese tyre makers who reduced their output last year are in the process of increasing their production this year which would affect the domestic players.

He said the company is looking to acquire rubber plantations overseas while urging the government to develop plantations in other areas within India.