MRF to set up tyre unit in Perambalur

Chennai: MRF expects to double its production capacity by the end of 2009 when its greenfield project for radial tyres would go on stream in Tamil Nadu.

MRF is planning a Rs 900 crore investment to set up a car-and truck-tyre manufacturing unit with a capacity to produce over 7-lakh tyres a month. The unit is to come up in Perambalur, near Tiruchi.

According to the company’s spokesperson, at full capacity, the unit will effectively double MRF’s production capacity for radial tyres. Initially, it will produce about 3.5 lakh radial tyres, primarily for cars, with the production to be ramped up in stages.

The funding for the project would mostly be through internal accruals and external commercial borrowing. The company is acquiring nearly 290 acres for the project at Perambalur, an industrially backward area.

Pact with State Govt:

According to an official press release, the company has entered into an agreement with the State Government for the project, which envisages setting up of a unit with a capacity of 3.5 lakh tyres a month in the first phase, which would be doubled to 7-lakh tyres in the second phase.

The unit would generate 2,500 jobs initially and twice that number at full capacity.

The release said the agreement was signed by the Industry Secretary, Mr M.F. Farooqui, and Mr K.M. Mammen, Chairman and Managing Director, MRF, in the presence of the Chief Minister, Mr M. Karunanidhi. The agreement provides for State Government support for setting up the new facility and expanding its existing units. The Perambalur facility would be eligible for incentives under the State Government’s industrial policy of 2007.

The new facility would be MRF’s third in Tamil Nadu, apart from the ones at Chennai and Arakonam. Its other production facilities are in Puducherry, Kottayam, Goa and Medak. The expansion would support the company to keep pace with the increasing demand for tyres from the passenger and truck radials.

Regarding the expansion plans at its existing units, the official said that it has a Rs 650-crore expansion programme in place. It is expanding the two-wheeler tyre production facility at Arakonam, the radial tyres production at Puducherry and at Medak.