President to declare open US$ 100mn Ferentino Tyre plant this week
To produce 3mn passenger car radials per annum mainly to be exported to US and European markets Onxy Group to rope in joint venture partner to develop second phase of the project „ Completion of second phase likely to be delayed; extension sought from B
The first phase of South and Southeast Asia’s largest tyre manufacturing plant, Ferentinotyre (formely known as Rigid Tyre) is scheduled to be opened this Thursday (14th) by President Gotabaya Rajapaksa.
Spanning across 155 acres in Wagawatta Industrial Zone in Horana, the overall investment of the project is estimated to be US$ 250 million, including US$ 100 million in the first phase.
The project is the brainchild of entrepreneur Nandana Lokuwithana, who heads the Uae-based Onyx Group and Ceylon Steel Corporation.
Although, the construction of the project began in early 2017, it faced delays as it ran into several issues at the initial stages. However, it was back on the track in the following year with the initially committed
investment of US$ 78 million increasing it to US$ 250 million.
Speaking t o Mirror Business during a media inspection tour of the plant last Friday, Lokuwithana said the factory in the first phase plans to produce three million passenger car radials (PCR) per
annum,including a specialised category for SUVS, mainly to be exported to the United States and European markets.
With the capacity to cater to the entire demand of the local market, he said that the plant has capacity to manufacture one million industrial tyres per annum for two-wheelers
and three-wheelers.the plant would also manufacture industrial tyres for buses and trucks.
The first phase of the project is 100 percent owned by the Onyx Group led by Lokuwithana. With regard to commissioning the second stage of the project, Lokuwithana revealed that plans are underway to enter into a joint venture with a foreign entity.
However, he noted that commissioning of the second stage of the project may fall behind by a few years due to delays in the initial stage and disruptions caused by the COVID-19 pandemic.
“We have another two years to complete the project as per the agreement we entered with the BOI. However, we are unlikely to commission the second phase of the project within the two-year period. Therefore, we may seek 3-4-year extension from BOI, due to disruptions caused by COVID-19 pandemic and due to certain other issues we had to face at the initial stage of the project,” he elaborated.
Overall, Lokuwithana noted that 80 percent of the plan’t production would be mainly exported to European and US markets where the Group already has established its presence.
In terms of sourcing raw materials, he said the company has held discussions with the government to explore the possibility of increasing the local rubber production, as the current production is not sufficient to cater to this demand.
“We intend to source our entire requirement of rubber locally thereby empowering the rubber farmers. This project is certainly a win-win for all parties involved,” Lokuwithana stressed.
As a part of its strategy to serve both local and international markets, Onyx Group has acquired Marangoni Group’s solid tyre business, which has 15 percent market share in Europe, including Marangoni industrial Tyres Lanka (Private) Limited in Sri Lanka.
The Marangoni brand has also been licensed to Onyx Group, limited to the manufacturing and distribution of solid tyre products, under Jumbo, Forza, Eltor and Quickmont brand names.