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The Investor Sentiment - Equity and investments forum for Sri Lankans

The Lankan Investor Forum - A more respectable and reasonable place for members to discuss matters regarding the CSEThe Lankan Investor Forum - A more respectable and reasonable place for members to discuss matters regarding the CSE

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Latest topics

» CCS.N0000 ( Ceylon Cold Stores)
TYRE.N 0000 - Kelani Tyres EmptyWed Mar 20, 2024 11:31 am by Hawk Eye

» Sri Lanka plans to allow tourists from August, no mandatory quarantine
TYRE.N 0000 - Kelani Tyres EmptyWed Sep 13, 2023 12:16 pm by lauryfriese

» When Will It Be Safe To Invest In The Stock Market Again?
TYRE.N 0000 - Kelani Tyres EmptyWed Apr 19, 2023 6:41 am by කිත්සිරි ද සිල්වා

» Dividend Announcements
TYRE.N 0000 - Kelani Tyres EmptyWed Apr 12, 2023 5:41 pm by කිත්සිරි ද සිල්වා

» MAINTENANCE NOTICE / නඩත්තු දැනුම්දීම
TYRE.N 0000 - Kelani Tyres EmptyThu Apr 06, 2023 3:18 pm by කිත්සිරි ද සිල්වා

» ඩොලර් මිලියනයක මුදල් සම්මානයක් සහ “ෆීල්ඩ්ස් පදක්කම” පිළිගැනීම ප්‍රතික්ෂේප කළ ගණිතඥයා
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» SEYB.N0000 (Seylan Bank PLC)
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» Here's what blind prophet Baba Vanga predicted for 2016 and beyond: It's not good
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» The Korean Way !
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» In the Meantime Within Our Shores!
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» What is Known as Dementia?
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» SRI LANKA TELECOM PLC (SLTL.N0000)
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» THE LANKA HOSPITALS CORPORATION PLC (LHCL.N0000)
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» Equinox ( වසන්ත විෂුවය ) !
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» COMB.N0000 (Commercial Bank of Ceylon PLC)
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» REXP.N0000 (Richard Pieris Exports PLC)
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» RICH.N0000 (Richard Pieris and Company PLC)
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» Do You Have Computer Vision Syndrome?
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» LAXAPANA BATTERIES PLC (LITE.N0000)
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» What a Bank Run ?
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» 104 Technical trading experiments by HUNTER
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» GLAS.N0000 (Piramal Glass Ceylon PLC)
TYRE.N 0000 - Kelani Tyres EmptyWed Mar 15, 2023 7:45 am by කිත්සිරි ද සිල්වා

» Cboe Volatility Index
TYRE.N 0000 - Kelani Tyres EmptyTue Mar 14, 2023 5:32 pm by කිත්සිරි ද සිල්වා

» AHPL.N0000
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» TJL.N0000 (Tee Jey Lanka PLC.)
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» CTBL.N0000 ( CEYLON TEA BROKERS PLC)
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» COMMERCIAL DEVELOPMENT COMPANY PLC (COMD. N.0000))
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» Bitcoin and Cryptocurrency
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» CSD.N0000 (Seylan Developments PLC)
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» PLC.N0000 (People's Leasing and Finance PLC)
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» Bakery Products ?
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» NTB.N0000 (Nations Trust Bank PLC)
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» Going South
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» When Seagulls Follow the Trawler
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» Re-activating
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» අපි තමයි හොඳටම කරේ !
TYRE.N 0000 - Kelani Tyres EmptyTue Feb 14, 2023 3:54 pm by ruwan326

» මේ අර් බුධය කිසිසේත්ම මා විසින් නිර්මාණය කල එකක් නොවේ
TYRE.N 0000 - Kelani Tyres EmptyTue Jan 03, 2023 6:43 pm by ruwan326

» SAMP.N0000 (Sampath Bank PLC)
TYRE.N 0000 - Kelani Tyres EmptyWed Nov 30, 2022 8:24 am by කිත්සිරි ද සිල්වා

» APLA.N0000 (ACL Plastics PLC)
TYRE.N 0000 - Kelani Tyres EmptyFri Nov 18, 2022 7:49 am by කිත්සිරි ද සිල්වා

» AVOID FALLING INTO ALLURING WEEKEND FAMILY PACKAGES.
TYRE.N 0000 - Kelani Tyres EmptyWed Nov 16, 2022 9:28 pm by කිත්සිරි ද සිල්වා

» Banks, Finance & Insurance Sector Chart
TYRE.N 0000 - Kelani Tyres EmptyTue Nov 15, 2022 5:26 pm by කිත්සිරි ද සිල්වා

» VPEL.N0000 (Vallibel Power Erathna PLC)
TYRE.N 0000 - Kelani Tyres EmptySun Nov 13, 2022 12:15 pm by කිත්සිරි ද සිල්වා

» DEADLY COCKTAIL OF ISLAND MENTALITY AND PARANOID PERSONALITY DISORDER MIX.
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» WATA - Watawala
TYRE.N 0000 - Kelani Tyres EmptySat Nov 05, 2022 8:44 am by කිත්සිරි ද සිල්වා

» KFP.N0000(Keels Food Products PLC)
TYRE.N 0000 - Kelani Tyres EmptySat Nov 05, 2022 8:42 am by කිත්සිරි ද සිල්වා

» Capital Trust Broker in difficulty?
TYRE.N 0000 - Kelani Tyres EmptyFri Oct 21, 2022 5:25 pm by කිත්සිරි ද සිල්වා

» IS PIRATING INTELLECTUAL PROPERTY A BOON OR BANE?
TYRE.N 0000 - Kelani Tyres EmptyThu Oct 20, 2022 10:13 am by කිත්සිරි ද සිල්වා

» What Industry Would You Choose to Focus?
TYRE.N 0000 - Kelani Tyres EmptyTue Oct 11, 2022 6:39 pm by කිත්සිරි ද සිල්වා

» Should I Stick Around, or Should I Follow Others' Lead?
TYRE.N 0000 - Kelani Tyres EmptyTue Oct 11, 2022 9:07 am by කිත්සිරි ද සිල්වා

» DV-2024 Program: Online Registration
TYRE.N 0000 - Kelani Tyres EmptyThu Oct 06, 2022 11:26 am by කිත්සිරි ද සිල්වා

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    TYRE.N 0000 - Kelani Tyres

    The Invisible
    The Invisible


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    TYRE.N 0000 - Kelani Tyres Empty TYRE.N 0000 - Kelani Tyres

    Post by The Invisible Fri Oct 02, 2020 10:28 am

    Sri Lanka’s CEAT ups tyre output amid import controls, holds prices

    ECONOMYNEXT – Sri Lanka’s CEAT KELANI Holdings Plc, a joint venture with India’s CEAT group has boosted output 35 percent and is adding more capacity amid import controls but is holding prices, a top official said.

    From June to September production of tyres had been increased 35 percent and the company was producing about 1,600 metric tonnes a month, Managing Director Ravi Dadlani said.

    CEAT KELANI Holdings is a joint venture between Sri Lanka’s Kelani Tyres, a privatized state enterprise that engaged in import substitution and CEAT Sri Lanka, a Board of Investment approved globally competitive firm that exported half its output.

    In April 2020 Sri Lanka slapped the worst import controls since 1971 when the Bretton Woods system of soft-pegs collapsed, after the central bank printed unprecedented amounts of money triggering forex shortages and driving the unstable peg (flexible exchange rate) of the rupee close to 200 to the US dollar.

    Covid Demand

    Amid a global Coronavirus pandemic some of CEAT- Kelani’s export markets have weakened.

    “Pre-Covid 68 to 70 percent was sold domestically and the rest was exported,” Dadlani said. “We can divert more of the export capacity to the domestic market because of the drop in export demand due to Covid-19.”

    The company’s export markets include Egypt, Philippines, Zimbabwe, Nigeria, Dubai and South Asia.

    In Truck Bus Bias ply (TBB) tyres the where the company produced about 80,000 out of a total annual demand of 100,000 to 105,000 tyres, the firm is on track to produce the entire domestic requirement, Dadlani said.

    The firm has to capacity to make 150,000 TBB tyres per year. CEAT is also expanding truck bus radials (TBR) output.

    In Truck bus radial (TBR) we were making 900 a month,” he said. “Now it is 1,800 units. It will be increased to 2,300 by the end of next month.”

    The firm is awaiting the arrival of new moulds.

    According to data published by publicly traded Kelani Tyres Plc, the joint venture produced 14,680 tonnes of tyres in the year to March 2020, as Sri Lanka’s economy slowed, from 16,074 tonnes a year earlier.

    Capacity

    Two wheeler tyre output had been raised from 27,000 pre-Covid to 43,000 to 44,000 a month.

    “We used previously underutilized capacity. Production has been increased 85 percent in two wheelers,” Dadlani said.

    The company says it produces about 50 percent of the total requirements of tyres in Sri Lanka which is estimated at around four million tyres.

    More capacity will also be added to Passenger Car Radial (PCR) and Utility Van Radial (UVR) segments.

    The firm is awaiting clearance from authorities bring down engineers to commission a production line.

    “Today there is 470mn equipment on ground waiting to be commissioned,” Dadlani said. “We are waiting for the machinery supplier’s engineers to be cleared to come.”

    In about six to eight weeks car and van radial tyre output will up 45 percent to around 51,000 tyres from 37,000 units a month.

    CEAT has also been buying more rubber from rubber farmers.

    Holding Prices

    Dadlani said the company has not raised prices but is using the opportunity to expand sales and win new customers.

    “We have not raised prices,” Dadlani said. “When the rupee depreciated (in the first quarter) we thought we would be compelled raise prices to pass on the cost. But now the rupee has stabilized. We have decided not to.



    “Consumer is paramount. It is our company philosophy. This is an opportunity for us to increase sales. To get to get new customers to try and get then try and accept to our product.

    “Our products are 25 percent cheaper (than imports).”

    The firm has just added a heavy duty bias ply tyre weighing a solid 52 kilograms for prime movers and large trucks.

    CEAT tyres are over engineered and can carry loads higher than the rated in trucks. In India many truck owners over load vehicles and drive large distances.

    Dadlani said reliability is a key factor commercial vehicle operators look for.

    CEAT has been investing in capacity and quality, Dadlani said. In the most recent 3 billion rupee program about 970 million had been spent only on quality improvements. This year about 1.1 billion rupees is being invested.

    The firm had lost about 2.5 months sales due to Coronavirus lockdown, Dadlani said, which would be recovered with higher output.

    In the year to March 2020 the joint venture posted revenues were 9.45 billion rupees down from 9.95 billion rupees a year earlier. After tax profits were 933 million rupees, down from 989 million rupees.

    Publicly traded Kelani Tyres reported profits of 422 million rupees in the year to March 2020 or earnings of 5.51 rupees per share, with the JV bringing in 466.9 million rupees.

    Import Substitution

    Sri Lanka’s import restrictions originally imposed in April and have been extended twice. The current extension is due to end in January.

    Sri Lanka is aggressively chasing import substitution by protecting producers at the expense of consumers after printing money to create foreign exchange shortages, following a strategy popularized in Latin America by the likes of Raul Prebisch, the architect of Argentina’s central bank.



    Sri Lanka has a Latin America style central bank, set up by Federal Reserve expert which has busted the rupee from 4.70 to 185 to the US dollar since its creation in the worst record in South Asia where currencies were derived from the Indian rupee.

    Most stability has been provided by the Monetary Authority of Maldives which has free trade and per capita income of 11,000 US dollars.

    The Fed’s Latin America unit, headed at one time by Robert Triffin, set up a number of central banks in Latin America reportedly inspired by Prebisch.

    කිත්සිරි ද සිල්වා likes this post

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    TYRE.N 0000 - Kelani Tyres Empty Re: TYRE.N 0000 - Kelani Tyres

    Post by කිත්සිරි ද සිල්වා Fri Aug 13, 2021 6:26 pm

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