Mumbai: Tyre maker Ceat Ltd, the RPG Enterprises’ flagship company, will sell the 25 acres of land occupied by its plant in Bhandup, a suburb of Mumbai, in the next 12-24 months and use the proceeds for a new project, managing director Paras Choudhry said in an interview.
Ceat had earlier sold 7 acres at the site for Rs130 crore.
Ceat plans to expand capacity and become the country’s second or third biggest tyre maker, where it is now No. 4. To reach that goal, it plans to grow at a rate of 20% every year, outpacing the tyre market’s growth of around 8%. Its plans also include setting up of new projects. Half the investments required for the projects will be through internal accruals.
Ceat will start production at its plant in Halol, Gujarat, next year, Choudhry said.
“Between Halol and some of the new programmes we are talking about, the total programme will come up to about Rs750 crore in the near future, subject to the approval. For that we will have to borrow Rs350 crore,” Choudhry said. Ceat has debt of around Rs400 crore on its books.
While organic growth is the strategy for its domestic business, Ceat is looking at acquisitions to expand abroad. Choudhry said there are offers already from a few geographies.
“Offers are generally (in) Europe. There are also possibilities in Asia. And also some smaller units in US are there, but we have to have a proper due diligence before we can think about anything.” he said.