NEW DELHI: JK Tire Industries has prepared a capital expenditure plan worth INR 1,100 crore for the next financial year, primarily to enhance capacity and meet the growing demand for tires in the domestic market. The company aims to expand across all its manufacturing facilities and produce 35 million tires annually by FY25. Its current combined production capacity is more than 33 million units.
JK Tire has nine manufacturing plants in India: three in Mysore (Karnataka), three in Laksar (Uttarakhand), and one each in Kankroli (Rajasthan), Panmure (Madhya Pradesh) and Chennai (Tamil Nadu). The company also has three factories in Tornel, Mexico.
The market leader in the truck and bus radial tire segment in India, the company is looking to expand capacity primarily for the PCR (Passenger Car Radial) category. This goes hand in hand with growing consumer interest in SUVs in recent years.
“Earlier, the board approved an investment of Rs 1,100 crore which will be completed by March 2024. The board has approved another investment of Rs 1,100 crore which will be completed by March 2025. Most of this amount will be allocated for quality construction and Improving capabilities,” Raghupati Singhania, Chairman and Managing Director, JK Tyre, told Autonexa.
The tire company has been regularly investing in expanding its capacity and maintaining existing infrastructure since 2022-23. Its total expenditure for FY23 and FY24 was Rs 1,100 crore, including maintenance expenses of around Rs 300 crore.
According to Singhania, diversified product offerings such as run-flat tires, smart tires and the recently launched Levitas tires are helping the company grow its passenger vehicle business. But he said the company has been slow to produce large tires.
“The high-rim tire category used to be about 16 inches. For larger SUVs in the market, it now goes up to 21 inches. Others have matured faster than us in this area. But we have now done some expansion work so that we have more capacity for larger tires. This would give us tremendous room to maneuver and open the door to a larger presence in the market. We are also working on expanding our business and this will be a key area of growth for us,” he said.
Looking to the future, Singhania is optimistic about the demand for tires in the local market, given the record sales volume in the automobile industry. “The tire market is expected to grow by 7-8% in the passenger vehicle segment and 5-6% in commercial vehicles during FY24,” he said.
JK Tire's consolidated net profit rose five-fold to Rs 249 crore in the July-September quarter on the back of strong performance in the domestic market.
Also Read: Buoyant auto demand impact: JK Tyre to invest INR 1680 cr for production ramp-up
