Kesoram Industries to Invest in Tire Business to Strengthen its Position in India

India: B K Birla group company Kesoram Industries will be infusing up to USD89.5 million in the ongoing fiscal year. As per the company plans, an investment of approximately USD52 million is scheduled for the tire business.

The company continues to strengthen its tIre business even though it sold its tire manufacturing plant at Laksar in Haridwar to JK Tyre.

The company has further stated that it will be spending around USD44 million for the completion of commissioning of its passenger car radial tire plant in Balasore in Odisha and USD7.45 million to make two and three wheelers tires in the same plant.

According to a recent report published by TechSci Research, “India Tire Market Forecast and Opportunities, 2021”, the country’s tire market is forecast to witness a CAGR of over 9% during 2016-2021. Though the replacement tire demand had a majority share in 2015, the OEM tire demand is expected to outpace replacement tire demand during 2016-2021. In 2015, Northern region accounted for the largest share in India’s tire market, followed by Southern, Eastern and Western regions of the country. Over the next five years as well, Northern and Southern regions are forecast to continue their market dominance and grab a cumulative market share of nearly 59% in 2021. Two-wheeler tire segment, which accounted for a volume share of over 50% in the country’s tire market in 2015, is also expected to maintain its position as the largest tire segment over the next five years.

As per TechSci Research, this strategic move by Kesoram is anticipated to increase company’s share in tire market of India over the coming years.