PAKISTAN: General Tyre makes fresh investment of Rs500 million in motorcycle tyre plant

"Pakistan is a market of 10.50 million motorcycle tyres per year with a 17 percent growth rate,” Shahid Hussain, chief executive of the company said. "This includes approximately seven million tyres required for replacements per year and 3.50 million required by motorcycle manufacturers per year.”

The source of investment is a mix of bank financing and cash generated from its sales operations, an official said on the sidelines of the conference.

The company is the country's largest producer of automotive tyres. It has full technological support of Continental AG of Germany, which itself is Germany's number one company in tyre manufacturing and the fourth largest company globally. The German company has a 10 percent shareholding in Gentipak. The Technical Services Agreement with Continental enables Gentipak to produce tyres of "GENERAL” brand and provide the latest technology for production of tyres based on Continental's R&D.

"The company has a 24 percent market share in Pakistan's automotive tyre segment,” said another official of the company Nasir Kamal. He, however, refused to share the company's expected market share in motorcycle tyre segment for the year. "We will market high-quality motorcycle tyres from March 2013 at a competitive price in seven different designs,” he added.

"The company, however, will consider exporting such tyres by next year when it would have tapped the local market,” he said.

Gen (Retired) Ali Kuli Khan Khattak, chairman of the company, said that it had been estimated that the government would have had to spend more than $200 million per year for the import of tyres to cater to local needs if his company did not exist.

He said that tyre manufacturing is an expensive and tedious process, which requires a lot of funds to continually expand. "Due to unfair competition, it becomes extremely hard for us to expand and at the same time make only marginal profits of 2% to 2.5%,” he said.

Gentipak was established in 1963 by General Tire USA and has been in production since 1964. The Plant and the Offices, are located in suburb of Karachi. Initial production capacity was only 120,000 tyres per annum but is now around 2,000,000 tyres per annum. The plant is constantly upgraded and is equipped with the most modern technology in tyre manufacturing.

Source: Daily "The News International", Karachi, and General Tyre website; 23 Feb 2013(Syed Rashid Ali, Karachi, Pakistan)