CEAT to spend 450cr to expand Chennai plant
The company is lining up a capex of 450 crore, said officials.
Kumar Subbiah, CFO, said: "Our planned capex (for FY25-26) was around 900 crore, but our board has approved an additional 450 crore for capacity expansion at our Chennai plant.
So, the total capex cash outflow for this year would be in the 1,000cr-1,050 crore range."
The 450 crore, he said, will be spent over two years. "In the current fiscal, the cash outlay from that amount will be 100cr-150cr." This new capacity addition is for PCR tyres.
"When we originally set up the Chennai plant, we planned for a capacity of 28,500 PCR tyres per day," said Subbiah. "However, tyre weights have been increasing because of a shift toward SUVs and larger vehicles. Even smaller vehicles are now being fitted with bigger tyres.
So, although the plant was designed for 28,500 tyres/day, current tyre weights have reduced the actual output of the number of tyres to 22,500-23,000 tyres/day in terms of units."
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The new expansion will increase upstream capacity by 80 tonnes/day, allowing CEAT to produce around 30,000 tyres/day. (Upstream capacity refers to processes like mixing, calendaring, and tyre building — basically tonnage-based inputs. Downstream involves curing and handling, which are measured by number of tyres.) This will ensure upstream and downstream align to achieve the 30,000 tyres/day target.
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And, more people will be needed. "We've already been adding people continuously and last Sept, we commissioned a new TBR plant there, which is ramping up well," said Subbiah. "PCR production is also increasing. We had originally committed to the TN govt that we would create 1,000 direct jobs. Today, we have already crossed 1,500. With the ongoing capacity expansion, that number will go up." The expansion will be funded through a mix of internal accruals and debt.
CEAT saw its profit after tax for Q1FY26 drop to 135.5 crore, down by 9% compared to 149.24 crore in the year ago period.
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