Sri Lanka approves proposal to set up new tire plant

Sri Lanka: The government of Sri Lanka gave a green signal to the proposal of establishing a tire plant with the production capacity of 3 million units per year. Malik Samarawickrama, the Minister of Development Strategies and International Trade, Government of Sri Lanka presented the proposal. He further called for an investment of USD75 million to set up the tire manufacturing plant in Gonapola, Horana district of Sri Lanka.The government sanctioned this project with a view of generating revenues up to USD470 million from the export of new tires, retreated rubber tires and tubes.

According the Sri Lankan officials, the “radial and industrial tire manufacturing plant” in Horana, would be set up by Italian tire company Marangoni. However, the exact time for the start of production is yet unknown.

According to a recent report published by TechSci Research, “Sri Lanka Tire Market Forecast and Opportunities, 2021’’, the tire industry in Sri Lanka has been growing over the last five years. Major factors driving the tire market include rising automobile sales and fleet, increasing income levels, growing infrastructure sector and easy availability of automobile loans at lower interest rates. In 2015, the country’s tire market was dominated by the two-wheeler tire segment, which accounted for a major share in the total tire demand in Sri Lanka. On account of consistent increase in sales of two wheelers and three wheelers, rising private sector investments in the country’s construction, agriculture and industrial sectors, and expanding fleet of commercial vehicles, the tire market of the country is forecast to swell, during the next five years.

TechSci Research is of the view that the new tire plant would help in expanding the tire market of the country and would further aid in generating revenues from the export of tires. This would consequently help the tire industry of the country to flourish during the forecast period.