Metro Tyres To Set Up Rs 30-cr Tube Facility

Font Size

Print

Feedback

Email

Discuss

New Delhi, March 31: Metro Tyres is setting up a Rs 30 crore four-wheeler tyre tube facility outside Delhi. This facility, set to begin production in December this year, will fulfil 100 per cent of global tyre major Continental AG’s global four-wheeler tube needs, which amounts to about 1,500 tons every year.

Metro manufactures two-wheeler tyres to Conti-nental under a tie-up between the two companies.

The tyre tube facility, which will produce 3,000 tons a year, will sell the remaining 1,500 tons in the Indian replacement and original equipment (OE) markets. Continental has found that tubes manufactured in India are 20 per cent cheaper than the tubes it currently buys from suppliers in Eastern Europe.

“We explored similar opportunities with other companies in India, but found they had no experience in tubes and could not deliver high quality,” said Continental’s automobile tubes head Thomas Peter. Continental also weighed suppliers in South Korea and Taiwan before hammering out the deal in India with Rs 300 crore Metro Tyres.

When asked, if his company would consider entering the four-wheeler tyre market as well, Metro Tyres chairman Rummy Chhabra said: “We would first like to stabilise tube supply in the Indian OE and aftermarket, after which we will consider manufacturing tyres as well. That is at least a year and a half away.” Metro’s proposed tube facility is likely to produce up to 4,000 tons without additional investment.

Mr Peter said that India’s infrastructural disadvantages and supply chain hitches (like last year’s trucker strike) were considered before the deal was made.