• Friday, October 24, 2014

Local firms look to make tyres for big vehicles

Sajjadur Rahman

Local companies have moved to make tyres for long-haul buses and trucks, a sector that is dominated by imports.
Gazi Tyre, a concern of Gazi Group, is the first to make large tyres for the rapidly growing transport sector.
“We have started producing tyres for big buses and trucks. We are now doing it on a trial basis,” said NG Saha, senior general manager of Gazi Group. “We will soon start commercial production.”
At present, four local companies are making light automotive tyres, taking advantage of a surging market that fully relied on imports a decade ago.
These companies—Apex Husain, Gazi Group, Meghna Group and Rupsha Tyre—manufacture tyres for light trucks, minibuses, microbuses, motorcycles, autorickshaws and easy bikes.
Some other companies, such as Seraj Cycle, Anwar Group and Update Group, are in the pipeline to make tyres for the local market.
In addition, Indian Ceat is setting up a factory here to produce tyres for the Bangladesh market.
“Bangladesh is a small country, but it is emerging as a very big and lucrative market for the tyre industry,” said Lutful Bari, director for operations of Meghna Innova Rubber Industry.
Demand for tyres has been increasing, driven by the growing urban population and use of motorised vehicles across Bangladesh, industry insiders said.
Monthly demand for motor cycle tyres has increased to 50,000 pieces at present, up by over 15 percent from the previous year.
The market size for CNG-run three wheelers goes up to 60,000 tyres a month.
However, Nosimons and Korimons, locally-made three-wheeler small vehicles that run in villages across the country, have also driven demand for tyres; nearly 20,000 tyres for these vehicles are sold a month.
Despite high demand for large tyres, the big local companies did not make an entry into the sector, as it requires large capital investments and consistent power supply.
Almost a decade ago, two big names—Rahimafrooz and Nitol—moved to produce automotive tyres, but their plans fell through for high capital investment requirements and dependence on the import of raw materials.
India's JK Tyre also tried to set up a joint venture to make tyres in Bangladesh.
According to Bangladesh Road Transport Authority, 54,492 motorised vehicles were registered in Dhaka in 2013 alone; the number was 137,109 countrywide.
“If we become successful in making tyres for big buses and trucks, Bangladesh will be able to save huge sums of foreign currency, which are spent on imports,” said Saha of Gazi.
Bangladesh spends around Tk 1,000 crore to import over 15 lakh pieces of tyres a year mainly from India, Japan and China, according to importers, distributors and sellers. Bangladesh also imports tyres from Vietnam, Thailand and Indonesia.

“Local companies are grabbing the market for light automotive tyres, which depended on imports a decade ago,” said Humayun Kabir, a leader of Bangladesh Tyre Merchant's Association.
Local makers have a price advantage over the imported tyres, sellers said. “A locally-made tyre for a pickup or microbus costs 20-30 percent less than an imported tyre,” said Mohammad Hannan, owner of a tyre shop in Farmgate in Dhaka.
SM Mojibur Rahman, sales executive at Tyre and Battery Bazar, said locally-made tyres for big buses and trucks have the potential to grab market share if manufacturers can ensure quality. Tyre and Battery Bazar is a dealer of GT Radial and MRF along with local Husain Tyre.
Husain Tyre that started production in 1996 with three-wheeler scooter tyres, now makes more than 10 types, including light ones for small trucks and microbuses.
Importers and sellers said a scarcity of raw materials as an obstacle to producing tyres in Bangladesh. However, the main ingredient, rubber, is now being produced by local cultivators.

Published: 12:00 am Monday, February 03, 2014

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