OCTOBER, 20249INDIA'S 2030 RENEWABLE ENERGY GOAL TO INCREASE CHINESE IMPORT DEPENDENCYCEAT LOOKING TO INCREASE PRODUCTION OF CHENNAI FACILITY BY 40 PERCENTCEAT has initiated a substantial capacity expansion project at its Chennai plant, aimed at boosting production of both truck & bus radial (TBR) and passenger car radial (PCR) tyres. Arnab Banerjee, Managing Director & CEO of CEAT Tyres, provided details on the project, noting that Phase I of the TBR production expansion was completed in the last quarter. The company is now moving forward with Phase II, which will be implemented over the next six to nine months, increasing the plant's TBR production from its current capacity of 45,000 units per month. The plant currently produces 20,000 units per day, and the company plans to expand this capacity by 30 percent to 40 percent, raising daily production to 27,000 to 28,000 unitsIn addition to the TBR expansion, CEAT is increasing its PCR production capacity. Banerjee stated that the company will incrementally increase production based on demand growth.The expansion is part of CEAT's Rs 1,000 crore capital expenditure (capex) program for the year. Alongside capacity increases, CEAT also implemented a price hike of 2 percent to 3.5 percent for its TBR and PCR products on October 1, driven by rising natural rubber prices and supply shortages in domestic natural rubber (NR). Banerjee mentioned that further price increases across other product categories, ranging from 1.5 percent to 2 percent, are expected in October, November, and December.Banerjee also discussed the impact of rising raw material costs, which increased by 6 percent in the second quarter (Q2). However, these costs are expected to rise more modestly, by 2 percent in the third quarter (Q3), with a projected easing in the natural rubber supply curve in Q4. India's ambitious target of installing 500 GW of renewable energy by 2030, largely driven by solar power, could significantly increase the country's dependence on imports, particularly from China, according to a report by the Global Trade Research Initiative (GTRI). The report projects that solar equipment imports may reach USD 30 billion annually unless India strengthens its domestic solar manufacturing industry.India installed 15 GW of solar capacity in 2023-24, bringing the total to 90.8 GW by September 2024, a significant increase from 2.8 GW in 2014. However, to meet its 2030 renewable energy target, India will need to accelerate the pace of solar installations to 65-70 GW per year. Over 80 percent of the renewable energy target is expected to come from solar power.Despite initiatives like the production-linked incentive (PLI) scheme, India's solar manufacturing sector is still in its nascent stage, with most projects dependent on imported solar modules, particularly from China. In 2023-24, India imported USD 7 billion worth of solar equipment, with 62.6 percent of this coming from China. China also dominates the global solar supply chain, controlling 97 percent of polysilicon production and 80 percent of solar module manufacturing, which makes it difficult for India or other countries to compete due to China's lower prices. TOP STORIES
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