New Delhi, August 12: Goodyear is planning a Rs 350-crore expansion of its production capacity through South Asia Tyres Ltd (SATL), its 50:50 joint venture with the RPG group company, Ceat.

The manufacturing unit of the joint venture has been set up at Aurangabad in Maharashtra with an installed capacity of one million tyres per annum.

Of the Rs 350-crore project cost, Rs 120 crore will come in the form of equity and the rest Rs 230 crore will be raised as debt. The company has already received the approvals for raising the debt portion.

The technology for the plant has been provided by Goodyear.

South Asia Tyres' present equity capital stands at Rs 47.25 crore. The plant will produce passenger radial, light commercial vehicles and earth mover tyres.

Currently, the unit manufactures only passenger radial and rolls out approximately 30,000 units a month.

Goodyear International has decided to invest to increase the growth in the production capacity of South Asia Tyres Ltd, Goodyear sales and marketing director E Krishnaiah said.

The joint venture plant is producing tyres that are being marketed by both Ceat and Goodyear. Under the joint venture agreement, the companies are supposed to pick up 50 per cent of the total produce of the new plant.

The brands that are being rolled out from the Aurungabad plant include Wrangler and GPS II from Goodyear, and Maestro from Ceat.In the current financial year, Goodyear is targeting to produce over 1,20,000 units, and the company has projected a sales turnover of over Rs 600 crore.

Duringthis year the company will also set up exclusive outlets through out the country.

The company is currently quite comfortably poised as it is focussing on a segment that is less vulnerable than bus and truck tyres, he said on Goodyear's position compared with its competitors.He explained that currently most of the bus and track tyre manufacturers are fighting one another through competitive pricing. "Goodyear would like to consolidate its position as a market leader in terms of its technological base," he said.

He also said that Goodyear would try and shed the image of a "sleeping giant".

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.