Increasing local tyre production but shortage persists
View(s):Sri Lanka is gearing up to produce more tyres using local natural rubber to meet the country’s requirement by setting up a couple of factories soon but the current shortage of tyres due to import restrictions drags on with no prompt solutions.
The present tyre shortage will push thousands of vehicles off the road within months as 5000 traders in the country had no adequate stocks to sell during the past six several tyre dealers, traders and buyers complained.
The government had classified 156 groups of products, including tyres, as non-essential imports and imposed restrictions on their importation in April.
It had relaxed imports for a few tire sizes in July. However, several sizes of tires are still classified as restricted items, the Asia Tyre Importers Association said.
Sunil Fonseka, Association Vice Chairman, noted that locally manufactured tyres accounted for roughly 50 per cent of the country’s annual demand of 3.1 million tyres in 2019.
“Up to 40 per cent of the 1.2 million passenger cars, light trucks, trucks and buses on local roads need imported tyres,” he said.
With approximately 150,000 imported tyres being sold per month in Sri Lanka, existing stock levels are draining quickly with the current import restrictions; he said adding that they foresee the country experiencing a shortage of tyres within the next 30 days.
Tires are not manufactured locally for European and Japanese premium vehicles such as Mercedes Benz, BMW, Volvo, Audi and Toyota Land Cruiser.
The government has issued a directive to dealers and traders to buy tyres from CEAT Kelani Holdings highlighting that a new factory will start production soon.
Presidential Task Force in charge of Economic Revival and Poverty Eradication Chairman Basil Rajapaksa told media at the recent opening ceremony of CEAT Kelani’s new hi-tech production facility for radial tyres that the country will be able to meet the local demand tyres soon.
CEAT Kelani is only manufacturing 50 per cent of the country’s requirement and the balance stocks of tyres is being imported from Singapore, Thailand, Korea and Japan, several tyre importers said.
The US$250 million rigid tyre factory in Horana owned by Rigid Tyre Corp. (Pvt.) Ltd, a unit of United Arab Emirates-based Onyx Group, is scheduled to begin its operations this November.
Hambantota International Port Group (Pvt) Ltd will build its first tyre factory with an investment of $300 million near Hambantota port.
The opening of these factories will help reducing tyre imports soon but an immediate solution should be evolved to avoid the present tyre shortage, the association said.
(BS)