Ceat has completed a round of worldwide search for a technical collaborator but has not been able to zero in on one yet. Senior officials said: "We will forge a technical tie-up only if there are no strings attached. We would not like to have a repeat of the Goodyear experience."

The company has spruced up its research and development activities with the aim of producing `quality' radial tyres on its own. The company wants to begin production of radial tyres at its Nashik unit in Maharashtra at the earliest.

"We had a technical tie-up with Yokohama of Japan earlier, so the company has the experience of producing radial tyres," the officials said. MRF Tyres, the leader in the Indian market, began producing radial tyreswith its own technology after its collaborator Michelin parted ways.

Ceat and Goodyear had formally split earlier in the year from the joint venture South Asia Tyres which was formed specifically to make radial tyres for both the partners to be sold under their respective brands.

Tyres analysts say that Ceat may have some problem getting the right collaborator as most of the international majors already have partners in India.

Michelin, the world's largest, has a 100 per cent subsidiary, while Bridgestone has already begun manufacturing its tyres in India. Continental AG of Germany has tie-ups with JK Tyres and Apollo Tyres, while Pirelli of Italy has a technology supply arrangement with Birla Tyres.

RPG group chairman Harsh Goenka had announced at Ceat's annual general meeting that the company had shortlisted several sites where it would like to set up a greenfield radial tyre making facility.

Ceat's radial facility at Waluj, near Aurangabad in Maharashtra, had been hived off into the equal jointventure with Goodyear - South Asia Tyres. The sale of the 50 per cent stake had fetched Ceat Rs 91 crore which the company utilised in paying pack high cost debt.

Under the separation agreement with Goodyear, Ceat can source its radial requirements from South Asia Tyres for the next two years within which it has to set up its own radial facility.

Ceat's thrust in recent years has been in cross-ply truck tyres as it has not been able to make much headway in the OEM segment forcing it to concentrate on the replacement market.

It has also decided to increase its presence in the two- and three-wheeler segment and acquired Rado Tyres of Kerala earlier in the year, and entered into jobbing arrangement with a closely-held 2/3 maker in Hyderabad.

INSIGHT

-- move makes little sense

A prospective foray into the radial tyre segment by Ceat makes little sense. Largely due to the fact that the dumping of radial tyres, which have been placed on the OGL could hurt growth prospects. Furthermore afistful of international tyre majors such as Bridgestone, Kumho, Pirelli and Continental AG have been aggressively eyeing the Indian market. While closer to home, domestic companies including JK Tyre, MRF Tyres and Apollo, are amongst the tyre manufacturers that have been feverishly expanding their capacities for radials.

All of which could well lead to an oversupply situation in radials. In fact, the scenario now is akin to a situation in the overall tyre market between 1994 and 1997, when stocks had piled in anticipation of an automotive boom, which never happened.