JK Tyres to hike prices by 2-4%

JK Tyres to hike prices by 2-4%

Tiruchirapalli: With rubber prices going up, tyre manufacturer JK Tyre & Industries has decided to hike price of its products by two to four percent a senior company executive said.

The price revision is inevitable and it would be made effective from the last week of January across the country, JK Tyre & Industries marketing director AS Mehta said in a telephonic interview.

“The raw materials prices have gone up to an all time high, touching 210 or even 220 per kg of natural rubber. When the price of natural rubber was enhanced 180 per kg in the previous quarter we did not increase the price of tyres since market conditions were not conducive," he said.

“The current increase in rubber price is unbearable and we have decided to jack up the selling price of all types of tyres."

The company, which clocked sales of 3,678 crore in the year 2009-10, should be better off in the current fiscal and as well in the next few years, he said.

“Third quarter results will be more or less similar to the tough Q2 or perhaps a shade better because only fourth quarter is more promising for tyre industries since the purchase of replacements are normally deferred only to the fag end of the fiscal."

Mehta however said the figure for the current year is rathersouthwards as far as exports,with a dip of 2 to 4%. In this fiscal, he projected that the exports will be in the range of 10% out of the total sales.

However, he maintained that the export business was fully taken care of by the plant in Mexico which was generating over 66 lakh tyres a year.

On expansion of market network, he said the company will unveil 10 outlets under the banner of ‘Truck Wheels´ as one stop shop for tyres.

The upcoming facility at Chennai will also be commissioned by the end of 2011.

In the first phase at the green site with an investment of 750 crore, the production capacity of truck radials will be to the tune of four lakh per annum and that of car radials 25 lakh, he said.

The Chennai facility is to generate job opportunities for about 1,200 people.

Similarly, for Vikrant Tyres the capacity of the manufacturing facility at Mysore has been stepped up from eight lakh to 10 lakh production in a year.

Mysore plant has already commenced full-fledged production of OTRs (off the road tyres) after successful trial runs and in fact India’s biggest OTR variety was rolled out in the first week of January.

The company had invested 120 crore for this OTR manufacturing process.