Rajratan Global Wire, a manufacturer of tyre bead wire/reinforcement wire, is planning to invest INR 370 crore to increase its bead wire production capacity from 100,000 tonnes to 180,000 tonnes per annum.
Yashovardhan Chordia, Director, Rajratan Global Wire, told Mobility Outlook that INR 70 crore is being invested in Rajratan's Thailand-located tyre bead wire manufacturing plant. This plant's capacity has risen from 40,000 tonnes to 60,000 tonnes per annum.
The company caters to the demand of Thailand-based, and international tyre makers from this sole international facility. Tyre makers including Apollo, Bridgestone, CEAT, Goodyear, JK Tyre, MRF, TVS Tyres, Yokohama, and more are included in the company's list of national and international clients.
Notably, tyre bead wires constitute a 3-4% cost in the overall bill of materials (BoM) for raw materials used in manufacturing a tyre.
The remaining INR 300 crore has been planned to be invested in Rajratan's upcoming Chennai facility which will begin part operations by March 2024. Rajratan, after the deployment of the Chennai facility, will have three tyre bead wire manufacturing locations located in Indore, Chennai, and Thailand.
'Our Chennai facility will make us one of the largest tyre bead manufacturing companies in Asia (outside China) once it is operational,' explained Yash.
Planned to be invested in two phases, a majority of 70% of this total INR 300 crore investment is dedicated to procuring new-age machinery and equipment for manufacturing reinforcement beads for tyres. Unlike Rajratan's existing Indore facility which only supplies to tyre manufacturers in India, the upcoming Chennai facility will cater to both Indian as well as International markets.
“We choose Chennai as the location for our second tyre bead manufacturing facility in India strategically as a lot of our clients are located in the South. Chennai plant is also close to the port so we are of the view that we will be able to do a lot of exports from our Chennai facility” noted Chordia.
He added, “We hardly export 10% of what we manufacture at our Indore facility. The Thailand facility also supplies nearly 65% of what it makes currently in the local market. The rest of what our Thailand facility manufactures goes to South East Asian and other countries.”
With the capability to manufacture 60,000 tonnes of tyre bead wire annually in Chennai, the company’s upcoming Chennai facility will be able to match the capacity of its existing Indore facility. Rajratan is also exploring expansion of its customer base in more South East Asian countries, America, and parts of Europe.
Yash explained that while the company has already invested in industry 4.0 for manufacturing, the upcoming Chennai facility will be the most modern the company operates for fabricating tyre bead wires.
“Implementation of industry 4.0 has all started at the root level. We have installed certain systems in order to make the shop floor paperless. Very soon we will have a considerable amount of digitisation done in our existing factories. All of that will be implemented in the Chennai facility from day one,” he said.
There are no plans for the company to foray into any new business vertical associated with the automobile industry. However, the company is evaluating the manufacturing steel chords for tyre makers some years from now.
“Our focus is purely on the bead wires. There is nothing on the cards in terms of diversification right now. said Chordia.
Rajratan is also geared up for manufacturing tyre beads for electric vehicle-specific tyres. “EV tyres will require the quality of the bead wire to be better than what it is today. We have also met the demands of tyre makers and I am sure we will be able to do the same with bead wires for electric tyres.
Rajratan's profit rose 134.01% to INR 124.33 crore during FY22 as against INR 53.13 crore during FY21. The company's sales also 63.37% to INR 892.86 crore during FY22 as against INR546.54 crore during FY21