MRF to roll out tyres from Tiruchi unit early next year

Tyre maker MRF Ltd will start production at its Tiruchi plant in the first quarter of the 2012 calendar year.

“Construction work is in progress at the Tiruchi plant. We will start production in the quarter beginning January and ramp up capacity in 6-8 months,” said Mr Koshy K. Varghese, Executive Vice-President – Marketing, MRF.

This facility was proposed as its existing six manufacturing units were operating at full capacity. The company has invested Rs 900 crore on the 200-acre plant, which will cater to both domestic and export requirements.

MRF’s other manufacturing units are in Arakonam, Tiruvottiyur (Tamil Nadu), Medak (Andhra Pradesh), Goa, Kottayam (Kerala) and Puducherry.

In FY2011, MRF invested close to Rs 900 crore. Investments for FY2012 (MRF's financial year ends September), Mr Varghese said, will be in tune to market conditions, given the slowdown in the auto industry.

To counter escalating rubber prices, MRF had hiked tyre prices four times, ranging from 1.5-2.5 per cent since January. “But this is not enough; hence dismal results last quarter. But we also can’t pass on the entire cost to customers given the intense competition in the industry.”

MRF is on the lookout for sourcing opportunities in the ASEAN region where it has a footprint, to tide over raw material shortage in India.

Apart from auto industry, MRF also has a small exposure in the aviation industry. It supplies 400-500 helicopter tyres a month to HAL and Defence. It is in discussions with the government to supply tyres to military aircraft.