Rajratan Global to make Chennai greenfield plant an export hub, Auto News, ET Auto
Chennai: Indore-based tyre ancillary company Rajratan Global Wire is planning to double capacity at its greenfield plant in Chennai and use it as an export hub. The company is investing Rs 300 crore in building a new factory in SIPCOT which will employ around 300 people, said CMD Sunil Chordia.
“We have executed a long term lease deed with SIPCOT Industrial park and received possession of land for the greenfield expansion in Chennai. The plant will have a capacity of 60,000 tonne per annum which we are doing in a single phase,” Chordia said.
The plant, he added, will start operations in 18 months and will take another two years to ramp up to peak capacity. But beyond that, the company has plans for further expansion.“We have extra land and once we reach the level of utilising 70%-80% capacity, we will plan for another 60,000 tpa line in Chennai,” he said.
The company currently has three 60,000 tpa lines — in Pithampur, Thailand and now Chennai. The Chennai factory will be primarily export-oriented because of its proximity to a port. “Around 50%-60% of the production in the Chennai factory will be exported,” said Chordia.
“As a plant location Pithampur is land locked so exports are tough but once our capacity in Chennai is available, we will export from both Chennai and Thailand,” he added.
The company already exports to South East Asian countries like Sri Lanka, Indonesia, Malaysia and Vietnam and ‘’in small quantities to Europe,” said Chordia. “Last year we started exporting to the US, but we are hobbled by limited capacity. Once the Chennai capacity is available, we will target Europe and US as big markets,” he added.
The export focus is thanks to a window of opportunity that has opened up with China. The global tyre bead wire market is one million tonne strong with China commanding 50% of it. The balance is controlled by other markets like US, Europe, India, Malaysia, Vietnam, Thailand and Korea. With China cutting back on export subsidies on value added steel products, India has an opportunity to increase its footprint.