Name game

Mumbai, Nov. 29: Ceat Ltd will acquire the global rights for the eponymous brand name from Pirelli & C. SpA for 9 million euros (Rs 55 crore).

The RPG group company, which is one of the leading tyre makers in the country, at present owns the brand in nine South Asian countries — India, Sri Lanka, Bangladesh, Myanmar, Pakistan, Bhutan, Nepal, Afghanistan and Vietnam. Pirelli is the owner of the Ceat trademark in the rest of the world.

According to Ceat, the acquisition will enable it to export radial and cross-ply tyres to the whole world under the Ceat brand. It will open up markets in Europe and South America where Ceat now exports under the Altura brand.

After the acquisition, all rights, title and interest in the brand will pass on to Ceat Ltd in the territories where Pirelli previously owned registrations for the brand, according to a press statement issued by the company.

However, Pirelli will continue to hold exclusive licence to use the name for radial tyres in Europe, South America, Turkey and Mexico and cross-ply tyres in South America, Turkey and Mexico till December 31, 2011.

The deal also includes a non-exclusive licence to Pirelli to use the brand in relation to both radial and cross-ply tyres worldwide till December 31, 2012 excluding the nine countries where Ceat Ltd operates. After December 31, 2012, Ceat Ltd will be the exclusive owner of the brand in business related territories all over the world.

Ceat manufactures over 10 million tyres every year and has a major market share in the truck segment. Pirelli Group is the fifth-largest manufacturer in the world in terms of turnover, with 20 factories in four continents.

Meanwhile, Ceat today said its Halol facility in Gujarat would start commercial production in about two months.

“The Halol plant is under trial production and commercial production will start by January 2011,” Ceat’s deputy managing director Anant Goenka said .

The company has invested Rs 650 crore in the plant, which has a capacity to make 3,00,000 passenger car radial tyres and 40,000 truck and bus radial tyres a month.

The company also plans to ramp up its Nashik facility to 200-tonnes-per-day from the present 165-tonnes at an investment of Rs 35 crore by December this year.