Mumbai, Mar 10 (UNI) Tyre manufacturer Ceat today inked an agreement with Ashford Infotech for an outright sale of the company's seven acre land, located in Bhandup in north-east mumbai, for Rs 130 crore.
Ceat has received Rs 120 crore as an advance with the remaining amount of Rs 10 crore to be paid in 4-6 months.
Proceeds from the sale will be invested in production of radial tyres and Off the Road (OTR) tyres projects worth Rs 800 crore, which will be supplemented by accurals and borrowings.
''We will focus on radials for trucks and OTR. The market for radials is growing, especially in the trucking business which has a demand for nine lakh tyres a month with eight percent of the vehicles running on radials. As for OTR, we have a 20-year experience,'' said Ceat, MD, Paras K Choudhary.
A Rs 500 crore truck radial plant will be set up either in Gujarat, Maharashtra or South India and will start operating in 2-3 years.
The location for the plant is expected to be finalised in 6-8 weeks, he said.
The second project will be a Rs 300 crore OTR tire facility based at Patalganga or Ambarnath, with a capacity of 40 tonnes, which will start operations in 20-21 months. The Bhandup plant will will also be shifted and merged with the facility.
UNI ZC SR SKB1922