MRF plans to set up a new tyre manufacturing unit in Gujarat involving an investment of ₹4,500 crore.
“The company on Wednesday signed a memorandum of understanding with the Gujarat government expressing its in-principle plans to set up a manufacturing facility for automotive tyres, tubes, flaps and related products,” the company said in a communiqué to stock exchanges.
“The company proposes to invest ₹4,500 crore over a ten-year period in a phased manner. MRF plans to broad-base its manufacturing facilities across India. The project will be funded through internal accruals and debt,” it added.
Apart from providing cost advantage in the domestic market, it may also help boost its exports given the strong port connectivity in the State.
MRF is a dominant player in almost all segments in the domestic tyre market. It is a leader in the replacement market.
New markets MRF’s International Business Division (IBD) has been working on identifying newer markets, product segments and suitable channel partners to boost exports.
The company has also identified motorsports tyres as a new vertical for IBD. After the roll out of MRF Motorsport Tyres in the UK in January 2016, the company has been focusing on boosting its brand profile in developed markets such as Europe and Australia as a precursor to launching its passenger brands in those markets.
It has eight factories spread across Tamil Nadu, Kerala, Goa, Andhra Pradesh and Puducherry.
On Wednesday, MRF shares closed 4.41 per cent higher at ₹55,340.50 on the BSE.