Kelani Tyres PLC is a tyre manufacturing company in Sri Lanka. Kelani Tyres originates in the privatisation of the government-owned Ceylon Tyre Corporation. Initially, privatisation is met with extreme employee industrial action for several months. Once the employee unrest dwindled, the company entered into an agreement with CEAT to set up a joint venture in 1993. In 1994, Kelani Tyres was listed on the Colombo Stock Exchange. In 2022, CEAT was amongst the 100 most valuable brands in Sri Lanka. The company moved to meet the total domestic demand for bus and truck tyres which would save LKR11 billion in foreign exchange through import substitution.

History

Sri Lankan Government The Government of Sri Lanka (GoSL) ( si, ශ්‍රී ලංකා රජය, Śrī Lankā Rajaya; ta, இலங்கை அரசாங்கம்) is a parliamentary system determined by the Sri Lankan Constitution. It administers the isl ...

's state-owned enterprise Ceylon Tyre Corporation was privatised as Kelani Tyres (Pvt) Ltd in 1992. The privatisation yielded LKR400 million for the government, and 2,000 workers were working at the factory at the time. Soon after the privatisation, the company plagued with

industrial unrest A labour revolt or worker's uprising is a period of civil unrest characterised by strong labour militancy and strike activity. The history of labour revolts often provides the historical basis for many advocates of Marxism, communism, socialism and ...

for seven months. The new owners closed the factory, and prohibited workers from entering the premises. The labour issues were resolved and the factory commenced operations again. In 1993, Kelani Tyres signed a tripartite agreement with CEAT Ltd of India and Associated Motorways (AMW) which resulted in the creation of Associated CEAT (Pvt) Ltd. In January 1999, Kelani Tyres entered into an agreement with Associated Ceat Holding Company (ACHL), and CEAT to set up a second

joint venture A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and economic risk, risks, and shared governance. Companies typically pursue joint ventures for one of four rea ...

, to unite tyre manufacturing. CEAT held 60% of the stake in the ACHL while AMW and

National Development Bank A national development bank is a development bank created by a country's government that provides financing for the purposes of economic development of the country. List of development banks Americas * Business Development Bank of Canada * Brazili ...

held 35% and 5% respectively. The joint venture company exported tyres to Asian, African and South American countries. The company was listed on the Colombo Stock Exchange in 1994.

Operations

Brand Finance valued CEAT Kelani Holdings's CEAT brand to be LKR2,922 million in 2022. CEAT ranked 38th most valuable brand in Sri Lanka, up by ten positions from last year.

Fitch Ratings Fitch Ratings Inc. is an American credit rating agency and is one of the " Big Three credit rating agencies", the other two being Moody's and Standard & Poor's. It is one of the three nationally recognized statistical rating organizations ( NRSRO ...

affirmed the

credit rating A credit rating is an evaluation of the credit risk of a prospective debtor (an individual, a business, company or a government), predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting. ...

of Kelani Tyre's subsidiary CEAT Kelani Holdings at AA+(lka) in July 2022. The credit outlook was adjudged to be stable. 80% market share in the bias tyre segment, 30% in

radial tyre A radial tire (more properly, a radial-ply tire) is a particular design of vehicular tire. In this design, the cord plies are arranged at 90 degrees to the direction of travel, or radially (from the center of the tire). Radial tire construction ...

and the economic crisis-driven demand suppression were cited as justification for the rating. CEAT-Kelani Holdings commissioned a new plant in its Kelaniya manufacturing complex to increase motorcycle tyre manufacturing. The new company is named Asian Tyres Pvt Ltd. The company accounted for 17% of the market share in motorcycle tyres. CEAT Kelani moved to supply the total domestic requirement of bus and truck tyres in 2015, in the wake of the government ramping up policies to develop domestic industries. It would save LKR11 billion in foreign exchange through

import substitution Import substitution industrialization (ISI) is a trade and economic policy that advocates replacing foreign imports with domestic production.''A Comprehensive Dictionary of Economics'' p.88, ed. Nelson Brian 2009. It is based on the premise tha ...

. In 2022, Kelani Tyres planned to invest LKR3.2 billion in increasing manufacturing capacity. Car and SUV tyre manufacturing capacity is planned to increase from 51,000 per month to 61,000 per month. Motorcycle tyre manufacturing capacity will be also increased from 41,000 per month to 57,000 per month.

References

External links

Official website
{{All Share Price Index 1991 establishments in Sri Lanka Manufacturing companies established in 1991 Companies listed on the Colombo Stock Exchange Manufacturing companies based in Colombo Tire manufacturers Formerly government-owned companies of Sri Lanka

History

Operations

See also

References

External links