JK Tyre and Industries (JK Tyres) is setting up a Rs. 1,500-crore greenfield radial tyre manufacturing facility at Sriperumbudur near here.

The project will come on 100 acres and will have a capacity to make 50 lakh passenger car radial tyres and six lakh truck/bus radial tyres. The first tyre from the upcoming plant will roll out of the assembly line in October 2011. Full production is expected by 2012.

JK Tyre's annual domestic capacity will reach 1.55 crore tyresonce the new plant goes into full production by 2012, according to Raghupati Singhania, Vice-Chairman and Managing Director.

A memorandum of understanding (MoU) for setting up the project was signed by Mr. Singhania in the presence of the Tamil Nadu Chief Minister, M. Karunanidhi, here on Wednesday.

Mr. Singhania said his company had chosen to set up this unit near Chennai as the city was becoming an automobile hub in the South.

Mr. Singhania said the facility would be environment-friendly. It would maximise the use of natural light for lighting inside the facility. It would be designed to have a zero-carbon leakage by using a modern carbon handling system. The manufacturing line would have highly automated machines for zero-error production and complete traceability through bar coding system maintaining a consistent quality of the produce.

He said the plant would provide direct employment for 1,000 people and fetch the Exchequer a revenue of Rs. 200 crore annually.

JK Tyres was also in 57 inch OTR (off the road) tyres, where it had a market share of 43 per cent.

The company had, over the last couple of years, invested around Rs. 500 crore on expansion programmes. It has five plants in India and three in Mexico. It was also outsourcing tyres from low-cost countries such as China. These outsourced tyres were sold in the Western markets as it suited their requirements, he said.

To a question, he said setting up a unit in China was difficult.

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