Japanese tyre major Yokohama Rubber Co has announced an additional USD 171 million investment into its upcoming off-highway tyre plant at Visakhapatnam in Andhra Pradesh, which will nearly double the initially planned daily capacity of 137 tonne to 257 tonne now. With this, the overall investment the Japanese group has made in its India business, which by production capacity and employee strength, is the largest globally at USD 508 million so far, Anil Gupta, chief operating Yokohama Off Highway Tires, told on Wednesday.
The initial plan for the Visakhapatnam plant, which is underway now with the steel structure being erected, was 137 tonne per day capacity at an investment of USD 165 million.
The capacity is being ramped up by 120 tonnes more at an investment of an additional USD 171 million, taking the total planned capacity to 257 tonne per day, Gupta, who also heads the global operations of Yokohama Off Highway Tires, said.
Of the USD 508 million cumulative investment, USD 336 million are flowing into the Vizag plant, coming up at the Atchutapuram industrial park in Andhra Pradesh on a 3,90,000-sq meter plot, Gupta said.
He added that the rest are incremental investments the group has made into the two plants that it had bought from Alliance Tyre Group in 2016 at Dahej in Gujarat (USD 135 million) and at Tirunelveli in Tamil Nadu (USD 37 million).
Yokohama had in early 2020 announced the Vizag plant with an investment of USD 165 million.
Yokohama Off Highway Tires is now the consolidated off-the-road tyre business of Yokohama Rubber, after the merger of its two off-the-road tyre businesses (Yokohama OTR and Alliance Tire Group) globally effective this January.
The company sells its products globally under the brands - Alliance, Galaxy, Primex and Aichi.
In India, the group has two units -- Yokohama Off Highway Tires India and Yokohama India. They manufacture passenger and commercial vehicles tyres.
Gupta said the Vizag expansion is to meet the rising demand for off-highway tyres in the global markets.
While the first phase at an investment of USD 165 million for 137 tonne of daily capacity will be on-stream by the first quarter of 2023, the new additional daily capacity of 120 tonne in the second phase is scheduled to start in the first quarter of 2024, he added.
"Though we recently doubled the capacity at the Dahej plant and began construction of the Visakhapatnam plant in the third quarter of 2020, given the rising global demand, we have decided to nearly double the planned capacity at the Vizag plant," Gupta said.
For the group's off-highway tyre business, India is the largest production base with 90 per cent of its global production coming in from the two plants in Gujarat and Tamil Nadu, which will go up after the Vizag plant goes on-stream, he said.
Dahej and Tirunelveli plants produce three of the group's core off-highway tyre brands (Alliance, Galaxy and Primex), which are used in agricultural, construction, industrial and forestry machinery. More than 90 per cent of the production are shipped to foreign markets, Gupta said.
While the Dahej plant has a capacity of 1,26,000 tonne per 360 tonne per day, the Tirunelveli plant is a 86,800 tonne per 248 tonne per day facility and these plants employ over 6,000 of the 7,000 global workforce at the group's off-highway tyre business.
The Atchutapuram facility at Visakhapatnam is being built on a 3,90,000-square metre site, Gupta said adding that the site is large enough for further expansion.
Yokohama's medium-term transformation plan seeks to position the group's off-highway tyres business as a future growth driver.
The group plans to expand the off-highway tyre business by capitalising on the strength of a multi-brand line-up that includes Yokohama, Alliance, Galaxy, Primex, and Aichi, and also to develop new markets.
The group is also increasing its off-highway tyre production capacity to further strengthen its market competitiveness.
Yokohama Off Highway Tyres specialises in design, development, manufacturing and marketing of agriculture, forestry, construction, industrial, earth-moving, mining and port and other commercial tires.
It has a product portfolio of over 3,500 stock keeping units.