The largest tyre manufacturer in India, MRF, recently announced that their Rs.900 crore new Tiruchi facility would soon start commercial production, in spite of the looming threat with the industry facing lower growth.
The DGM of the company, Rajat N Nangia was quoted as saying that they are continuously improving their capacity. Their new Tiruchi facility will soon begin operations. According to reports, the Tiruchi facility, which is the company’s seventh plant, will be able to produce car radials as well as truck tyres.
Nangia said that there were some signs of the industry slowing down, with even car manufacturers fearing a lower rise in the sales of cars. He said that though you cannot predict this right now, growth is likely to ease by more than 20%. He also said that the company would also have to a decision regarding price hikes for tyres by 5 to 10%, depending on tyre categories, because of the rising input costs.
When Nangia was asked about the company’s proposed bond issue, he said that the process of raising money through a $110mn bond was already underway. As of now, they are in the course of raising around $110mn or Rs.500 crore through bonds.