CHENNAI, Sep 18 : Automotive tyre major JK Tyre & Industries Ltd has started shipping out its tyres to Europe, Brazil and other markets after US hiked its import duty on Indian goods to 50%, said a top company official.
He also said the duty hike by the US will not have a major impact on the company and added that the company will be passing on the 10% reduction in the Goods and Services Tax (GST) to its customers.
Speaking to select visiting journalists to the company’s plant near here Anshuman Singhania, Managing Director said: “Exports to the
US accounts only about 3% out of our 12-15% export revenue. So the duty hike is not a major issue for the company. We are now exporting to Brazil, Mexico, Europe and looking at African and other Asian markets.”
He said the company has two plants in Mexico and exports to the US do happen from India as well as from the former.
As the US has paused the implementation of revised duty on Mexico for 90 days, there is not much of an impact, Singhania said.
There will be a positive solution to the duty issue as the dialogue between India and the US is happening, he added.
According to him, the company is the largest exporter of truck radial tyres to the European union and the UAE.
“We have a huge way to go into the European market. We feel the growth will be good from next year onwards,” Singhania remarked.
According to R.Vinaya Krishnan, Vice President-Works, the 350 ton per annum (tpa) Rs.2,600 crore outlay Chennai plant contributes to over 20% of the company’s overall revenue and also caters to the overseas market.
The Chennai plant has roof top solar power capacity of 7.5MW and wind power capacity of 24MW.
Queried about the break-up of tyre sales to vehicle makers and the replacement market Singhania said it will be 60:40.
Meanwhile, the company’s Rs.1,400 crore expansion project in two of its 11 plants that began in FY24 is expected to start contributing to the revenue from the third quarter of this fiscal and full scale contribution is expected by the end of this fiscal.
The company also has plans of capital expenditure of about Rs.1,400 crore. It is part of the operations, Sanjeev Aggarwal, Chief Finance Officer told this writer.
The Rs.14,772 crore revenue company has a total capacity of about 3.5 crore tyres per annum.
On the raw material price front, Singhania said last year the price went up by 10% and the company was able to pass on only some portion of that.
He said during the first quarter of the current fiscal there has been a price reduction in the raw material and in the coming quarters, the price is expected to be range bound.
Looking forward, Singhania said the tyre demand is expected to roll upwards during the upcoming festival season, reduction in GST and also due to good monsoon.
Imports of tyres is not a major issue for the Indian tyre industry.
(UNI0
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