MUMBAI, India-JK Industries Ltd. intends to spin off its tire business.
India´s No. 3 and the world´s 20th largest tire maker said the spinoff will provide the tire business with an opportunity for a more focused approach, and will maximize its value to stakeholders. The tire business has annual sales of about $500 million.
JK disclosed its intention Feb. 8 in a memo to the BSE, the Indian stock exchange in Mumbai.
The company noted it recently invested $35 million to expand its capacity to produce radial truck and passenger tires by 50 and 30 percent, respectively. It claims to have about 85 percent of India´s domestic capacity for radial truck tires.
JK noted it was No. 1 in the Tire Customer Satisfaction Index Study conducted by JD Power Asia Pacific 2005 India.
The firm is being advised by Ernst & Young Pvt. Ltd. and M/s Amarchand Mangaldas & Suresh A Shroff & Co.
JK Industries is part of a broader JK organization that makes paper, cement, drug and pharmaceutical, agri-genetics, dairy and food, cosmetic, textile, steel, and industrial rubber products.