NEW DELHI—Indian tire maker JK Tyre is investing $27 million in debottlenecking its plants over the next two years, according to managing director Anshuman Singhania.
The company operated at a utilization rate of 95 percent during the six months to end of March and wants to "sweat its assets fully" through increasing operational efficiency and debottlenecking, he said during a May 21 conference call.
The investment will go toward acquiring "certain equipment for certain processes that are missing" and will increase the current capacity of 32 million tires per year by roughly 10 percent, he said.
The move is part of JK Tyre's focus on premiumization of its products and increasing volumes, Singhania said.
JK Tyre posted healthy growth for the financial year ended March 31, especially during the fourth quarter.
Over the three months to end of March, the company reported sales of $396 million, up 63 percent compared to the year before.
The company linked the growth to increased demand from both replacement and OEM segments.
Fourth quarter operating profitability increased by 119 percent to $633 million, while earnings (EBITDA) margins expanded substantially by 410 basis points to 16 percent.
The company said it increased profitability through higher volumes, higher operational efficiencies and strict cost control measures.
For the full year, earnings were up 33 percent at $182 million on 4.5 percent higher sales of $1.2 billion.