Ceat Limited will invest Rs 1,000 crore in two new plants, a research and development (R&D) centre, and on re-branding in the next two to three years, said Paras K Chowdhary, its managing director. The company has also done away with the ?Rhino?, its mascot, and the tagline ?born tough?.
Of this, Rs 900 crore will go into the two new plants coming up at Ambarnath near Mumbai and a radial tyres plant. Around Rs 340 crore including cost of shifting will go into the new plant coming up at Ambarnath and Rs 560 crore will be invested in the new radial plant to come up most probably in Gujarat.
The Ambarnath plant will look into specialty tyres and the radial tyre plant will house both passenger and truck and bus radials, he added. Currently, Ceat has a small passenger car radial facility at Nasik, which will be integrated into the new plant.
?We plan to fund the entire investment through borrowing, internal accruals and sale of land,? Chowdhary said.
Ceat is in the process ofre-locating its Bhandup plant to Ambarnath. It has already sold about seven acres ofvacant land to Ashford InfoTech Limited.
The remaining Rs 100 crore will be invested in an R&D centre at Ambarnath and in re-branding.
Asked why Ceat has done away with the 50 years old logo that is synonymous with it, Harsh Goenka, chairman, RPG Enterprises said, ?The general perception is that the Rhino is getting extinct and is a sloth. This made us change the logo to a more modern one.?
Ceat also plans to redefine its position with the new look. ?We will create more touch points in the country,? said Chowdhary.
Ceat has recorded the highest profit in the last 50 years in the FY?08, with a turnover in FY?08 touching Rs 2,600 crore. Exports stand at more than Rs 500 crore. ?We are looking at maintaining 20% Y-o-Y growth,? said Goenka. ?We are looking at exports touching Rs 600 crore this fiscal,? said Chowdhary.
Ceat is in the final stage of discussion for technology partner and location. ?Gujarat has a better chance compared with Tamil Nadu,? said Chowdhary. For the technology partner, it is in the final stage of negotiation. ?The decision will come up within three months.?
Asked if Ceat was looking at diluting stake in the radial plant, Goenka said, ?The technology partner will not hold any equity stake.?
The total capacity of the company will go up by 30% once the two new facilities are operational. ?We are looking at 200 tonne per day from the two new plants,? said Chowdhary.
