Tyre manufacturer CEAT, the flagship company of Indian industrial conglomerate RPG Group, has signed a joint venture agreement with a major Bangladeshi business group, A.K. Khan and Company to build a tyre manufacturing plant in Bangladesh.
Jyotibrata Banerjee, managing director of the joint venture CEAT A.K. Khan Limited, said CEAT wants to become the top company in the tyre market of Bangladesh by setting up a factory in Bhaluka, Mymensingh with an initial investment of US$67 million.
The factory is expected to have production capacity for 65 tonnes per day, according to a recent stock exchange filing.It will primarily be aimed at truck and light truck sectors, but will also devote around 20% of capacity to tyres for two- and three-wheelers.
Since importing tyres from neighbouring India is costly at present, consumers will be able to buy locally manufactured tyres at a lower price, Banerjee said. He also said the current CEAT grip motorbike tyre price will be lowered to Tk1,700 from the current price of Tk2,400 if it will be produced in Bangladesh.
The construction of the tyre manufacturing facility to produce light and medium truck tyres as well as two-wheeler tyres in Bangladesh was initially announced by CEAT in 2013. However, the project was delayed due to certain land-related complications.
Banerjee said that they also want to export 30% to 35% the tyre production in Bangladesh to the bordering states of India at a much lower price.