IFC, JK Tyre Partner for Expansion of Energy-efficient Tyre Manufacturing to Boost Exports, Create Jobs

  • JK Tyre is infusing a total investment of INR 2,200 crore to strengthen its position in the competitive Indian market. 

    • The investment of INR 1,400 crore is going to be utilised in both PCR and TBR segments to boost its capacity to approximately 20% and escalate exports by 2027
    • Currently, the homegrown tyremaker’s total capacity is nearly 34 million units of tyres per annum, out of which PCR is about 15 million, TBR 4 million and the balance comprises Truck Bus Bias (TBB), two/three wheelers, etc

    • Singhania said the company will deploy around Rs 1,000 crore in expanding its PCR capacity while another Rs 380-390 crore will be spent on ramping up the output of OTR (Off The Road) and TBRs. 

    • When asked if the company will also be spending on building capacities for  Electric Vehicle (EV) tyres, Singhania noted, “We are constantly upgrading our equipment wherever required and there is no separate investment being made or earmarked for EVs.  We are already supplying EV tyres for (battery-driven) buses and have the technological capabilities to roll out such products.”

    • During the last fiscal, the homegrown tyremaker invested Rs 800 crore for capacity enhancement and product development.

    • He also hinted that the company will roll out tyres tailormade for Sports Utility Vehicles (SUV) in the aftermaket.

    • FY25 outlook

    • The company expects a 9-10 percent growth in its topline in FY25, buoyed by government infrastructure spending, rising domestic auto demand and a recovery in exports

    • Talking about the outlook for FY25, Singhania said, “While the passenger vehicles and two-wheeler segments are seeing good traction, commercial vehicles, which are flattish, may see marginal growth. On the other hand, exports are likely to catch on,  helping us in generating demand. On the whole, the automotive sector may see around 6 percent growth during the same period.”

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    IFC, JK Tyre Partner for Expansion of Energy-efficient Tyre Manufacturing to Boost Exports, Create Jobs 

    • A new investment will strengthen India’s efforts towards self reliance in manufacturing, while boosting skilled job creation, exports, and sustainable growth, with IFC’s support to leading tyre manufacturer, JK Tyre & Industries Ltd. 
    • IFC’s about INR 240 crore investment in JK Tyre & Industries will part-finance the expansion of manufacturing capacities and integrate advanced, resource-efficient technologies in the production of commercial and passenger car radial tyres which have better safety and longevity. 
    • IFC will hold 5.6 percent stake in the tyre major through issue of compulsorily convertible debentures (CCDs) on preferential basis. 
    • The investment aims to bolster the company’s capital structure and increase production of energy efficient radial tyres by more than 10 percent—from 32 million to over 35 million tyres a year by 2025. 
    • This aligns with the national vision of a self-reliant India (Aatmanirbhar Bharat), and strong focus on industrial job creation. 
    • The automobile industry is witnessing huge tailwinds on the back of the government’s push towards infrastructure development, higher GDP growth and large allocation of funds towards capital expenditure in India. Improved vehicle utilisation, due to last mile connectivity and vehicle scrappage policy, is leading to a cyclical uptrend in the automobile and tyre industry. The automotive industry accounts for almost 49 percent of India’s manufacturing GDP, with tyre manufacturers contributing to 2 percent, and demand is expected to grow further.  

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