IFC, JK Tyre Partner for Sustainable Tyre Production
With the help of the International Finance Corporation (IFC), JK Tyre & Industries Ltd, a top tire manufacturer, will receive a new investment that will contribute to India's goal of self-sufficiency in manufacturing. The investment will also promote the creation of skilled jobs, exports, and sustainable economic growth.
JK Tyre & Industries will receive $30 million (approximately INR 240 crore) from IFC to partially fund the expansion of its manufacturing capabilities.
The investment will facilitate the integration of advanced, resource-efficient technologies for the production of radial tires for commercial and passenger vehicles, which provide better safety and durability. IFC will acquire a 5.6 per cent stake in the tire manufacturer through the issuance of preferential compulsorily convertible debentures (CCDs).
The investment from IFC aims to strengthen JK Tyre & Industries' capital structure and increase the production of energy-efficient radial tires by more than 10%, from 32 million to over 35 million per year by 2025. This is in line with the national vision of an independent India (Aatmanirbhar Bharat) and a strong emphasis on job creation in the industrial sector.
The Indian government's focus on infrastructure development, higher GDP growth, and increased capital expenditure is creating a favourable environment for the automotive industry. The last mile connectivity and vehicle scrappage policy are improving vehicle utilisation and leading to a cyclical upswing in the automobile and tire industries.
Tire manufacturers contribute to 2% of India's manufacturing GDP, and the automotive industry accounts for almost 49% of it. With growing demand, the industry is expected to expand further.
Chairman & MD of JK Tyre, Dr Raghupati Singhania, said the investment will aid growth and promote sustainable development. Wendy Werner, IFC India Country Head, said the partnership with JK Tyre aims to drive capacity expansion, sustainable manufacturing of energy-efficient tyres and market competitiveness. IFC's investment signals long-term support for India's domestic manufacturing and global manufacturing hub goals.
The investment from IFC will aid JK Tyre & Industries in achieving its goal of being a "Green Company" by promoting sustainable energy and resource usage and implementing strong ESG practices.
The funding will support the company's low-carbon strategy, enhance its ESG frameworks, decrease greenhouse gas emissions, and encourage climate-smart initiatives through decarbonisation and sustainability consulting.
Source: JK Tyre