JK Tyre industries, in its press release has informed about the company’s decision to raise its tyre prices by marginal 2-4 percent by the end of January. The rising rubber prices have made it a necessity. Marketing director of JK Tyre & Industries, AS Mehta was quoted as saying, that the decision to revise the prices by 2-4 per cent was inevitable and will be in effect from the last week of the current month across India.
Natural rubber’s prices have touched an all time high of Rs 220 per kg, it being the primary raw material, the increase in prices were unavoidable. When the prices of natural rubber rose to Rs 180 in the last quarter, lack of conducive condition delayed the price rise. The tyre industry is bearing the brunt of this phenomenon which has increasingly become unbearable and hence JK Tyre & Industries had to take this unpopular decision.
The market scenario for the performance of the company was summed up as, third quarter to be similar to the tough Q2, fourth quarter was billed to be a bit better since replacement purchases are deferred up to the fag end of the fiscal year.
The company was optimistic about the New Year, which stems from the data of net sales of Rs 3,678 crores in the year ending 2009-2010. Expansion plans have also gathered steam with an upcoming facility in the southern state of Tamil Nadu which will be online by the end of 2011. Rs 750 crores worth of investment will be pumped in during the first phase at this green site. The capacity will be expanded to car radials to 25 lakhs and that of truck radials will be of four lakhs per annum. 1,200 people will get direct employment opportunity due to this investment.
The existing plant at Mysore has commenced the production of off the road tyres (OTRs) and the fact is that India’s biggest OTR variant has rolled out from this plant in the 1st week of January.