MUMBAI: India's leading tyre manufacturer RPG Group’s arm CEAT has recently announced formation of a joint venture company with the Bangladesh-based AK Khan & Company to set up a manufacturing facility in the neighbouring country.
The company plans an investment of $67 million or Rs 360 crore for capacity of 110 metric tonnes per day in phases , which is expected to be functional by December 2014.
As per the joint venture agreement, CEAT will hold 70 per cent stake and the local firm will have the rest 30 per cent.
“This strategic partnership will enable us establish a leadership presence in the large tyre market of Bangladesh,” Anant Goenka, Managing Director, CEAT said.
With this plant, our aim is to manufacture the high quality products using the best of local skills while contributing to the development of the local Bangladesh economy, he said.
Under the agreement, CEAT will provide technical and business expertise and manage the JV operations, while AK Khan will bring in knowledge of Bangladesh market besides providing the strength of “goodwill and local presence”.
Salahuddin Kasem Khan, Managing Director, AK Khan & Company said, “The plant will earn valuable foreign exchange for the country by exporting approximately 20 per cent of its output to the region and rest of the world.”
The Joint Venture plant will manufacture bias tyres in truck, light commercial vehicle, and two-three wheeler segments for the local Bangladesh market.