CHENNAI: Going by the investments pouring into making automotive tyres, the wheel of fortune is set to swing the Tamil Nadu way. According to
official estimates, a copious investment of nearly $ 1 Billion has already been pumped into the State by leading tyre companies.
Apollo Tyres, ATC Tires, MRF, Dunlop and TVS Srichakra are some of those who have made big ticket investments, earning TN the tyre capital tag. The sector is also attracting more players. "We are gearing up for a fresh investment wave of Rs 5,600 crore in the tyre sector in the next 3-4 years," a top government official told ET, on condition of anonymity. Already, investments of Rs 4,400 crore are either in the partial completion or under implementation stage this year, the official said.
Last week, the state cabinet at one stroke gave the formal nod to MNC, Michelin’s proposal to set up a Rs 4,000 crore greenfield project, near Chennai. It also cleared the proposal of Apollo Tyres to scale up investment at its upcoming radial tyre project at Oragadam from Rs 500 crore to Rs 2,100 crore.
This apart, waiting in the wings to enter the State are the other MNC, Bridgestone and Indian major, J K Tyres.
Industry sources said the tyre companies making a beeline is to be viewed in the context of Chennai having attracted almost all the global auto majors. If their car projects come through, Chennai would have an installed capacity of 1.28 million cars by the end of 2010.
With the vehicle manufacturers keen on having more than one supplier, the tyre projects would mainly cater to the OEM demand. Later, the well developed port facilities in the State would encourage them to tap the export markets. The key raw material, rubber can be sourced from Kerala and Kanyakumari or imported.
Bridgestone, which has sought 100 acres, is in advanced stages of negotiation to formalise its pact with TN. It is gleaned from a reliable industry source that it is looking at Thervaikandikai, near Gummidipoondi, in Kanchipuram district to set up its project.
It is the same location where Michelin is putting up its project on 290 acres. That the state has alienated 1,122 acres in Thervaikandikai has been earlier confirmed to ET by Sipcot MD N Govindan. He had then said Michelin zeroed in on this particular site as it felt this to be the ideal location, given its proximity to the sea port and 40-km distance from the city.
It is also learnt from multiple sources that J K Tyres has been scouting for 100 acres at Sriperumbadur in order to be close to the OEs in the bustling auto corridor. The project entails an investment of over Rs 1,000 crore. Madurai too is a possible location where the group company, Fenner (India) has its conveyor belt making plant.
RAKESH KUMAR
PGDM IST SEM
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