New Delhi, India, March 22, 2023 – A new investment will strengthen India's efforts towards self-reliance in manufacturing, while boosting skilled job creation, exports, and sustainable growth, with IFC's support to leading tyre manufacturer, JK Tyre & Industries Ltd.
IFC's $30 million (about INR 240 crore) investment in JK Tyre & Industries will part-finance the expansion of manufacturing capacities and integrate advanced, resource-efficient technologies in the production of commercial and passenger radial tyres which have better safety and longevity. IFC will hold 5.6 percent stake in the tyre major through issue of compulsorily convertible debentures (CCDs) on preferential basis.
The investment aims to bolster the company's capital structure and increase production of energy-efficient radial tyres by more than 10 percent—from 32 million to over 35 million tyres a year by 2025. This aligns with the national vision of a self-reliant India (Aatmanirbhar Bharat), and strong focus on industrial job creation.
The automobile industry is witnessing huge tailwinds on the back of the government's push towards infrastructure development, higher GDP growth and large allocation of funds towards capital expenditure in India. Improved vehicle utilisation, due to last mile connectivity and vehicle scrappage policy, is leading to a cyclical uptrend in the automobile and tyre industry. The automotive industry accounts for almost 49 percent of India's manufacturing GDP, with tyre manufacturers contributing to 2 percent, and demand is expected to grow further.
Dr Raghupati Singhania, Chairman & Managing Director of JK Tyre & Industries Ltd. said, "We recognize the trust reposed by IFC in our Company and are enthused to embark upon this new partnership. IFC's investment will be utilised for the expansion of projects, which are not only growth-oriented but also committed to promoting sustainable development and enhancing societal value creation. Innovation and technology are at the core of each of our products, which keeps us ahead of the curve to meet the needs of our customers."
Wendy Werner, India Country Head at IFC said, "A leading green tyre manufacturer with a demonstrated focus on sustainability, our partnership with JK Tyre & Industries will drive their capacity expansion and scaled manufacturing of energy-efficient tyres through resource-efficient tech, low-carbon solutions, and circularity. By signalling a long-term view of the industry, IFC aims to catalyze further investments and market competitiveness, and in so doing, contribute to India's goals to become both self-reliant in domestic manufacturing, and a global manufacturing hub. We are unlocking the potential of India's manufacturing sector to drive job creation and sustainable growth."
JK Tyre & Industries aims to up the ante as a "Green Company" with sustainable use of energy and natural resources and robust ESG practices. The investment will support the company's low-carbon strategy, further strengthen its ESG frameworks, reduce greenhouse gas emissions, and spur climate-smart initiatives through decarbonization and sustainability advisory.
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
About JK Tyre & Industries Ltd.
The flagship company of JK Organisation, JK Tyre & Industries Ltd is amongst the top 25 manufacturers in the world with 12 globally benchmarked ‘sustainable’ manufacturing facilities - 9 in India and 3 in Mexico – that collectively produce around 32 million tyres annually. Pioneers of radial technology, the Company produced the first radial tyre in 1977 and is currently the market leader in Truck Bus Radial segment. The Company provides end-to-end solutions across segments. JK Tyre’s unwavering commitment towards innovation is reflected through its state-of-the-art global research and technology centre the “Raghupati Singhania Centre of Excellence” in Mysore, which houses some of the world’s finest technologies and techniques. JK Tyre secures ‘Best in Class’ rating in ESG performance - CareEdge has undertaken ESG rating of the Company. In recognition of its superior environment, social and governance practices, JK Tyre has been rated as the best among peers, in the sub-industry category of tyre. JK Tyre recently was awarded the most coveted Safety award in the world -the Sword of Honour for Safety across its plants by the British Safety Council, UK. JK Tyre also received award to be among the India’s top 30 Most Sustainable companies, organized by Business World.
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