Ferentino Tyre targets US$ 300mn export revenue with US$ 250mn phase 2 investment

Ushantha Jayalath Pic by Nimalasiri Edirisinha

By Nishel Fernando

Sri Lanka’s largest tyre manufacturer, Ferentino Tyre, announced plans to significantly expand its operations with a US$ 250-300 million investment in the second phase of its plant. 

This expansion is expected to boost annual export revenue to US$ 300 million, a substantial increase from the current US$ 100 million.

Spanning across 155 acres in Wagawatta Industrial Zone in Horana, the first phase of the project was commissioned in 2021. Following the acquisition of required certifications and the deployment of effective export market strategies in key markets in 2023, exports started to gather momentum. 

“The second phase will enable us to meet the diverse specifications of various international markets. The estimated investment for the second phase is US$ 250- US$ 300 million investment. This may change based on the product range. We are actively seeking investors and have already initiated negotiations with several potential partners,”  Ferentino Tyre Corporation Chief Operating Officer/General Manager  Ushantha Jayalath told Mirror Business on the sidelines of a press conference held in Colombo this week.

The company anticipates that the relocation of U.S. manufacturers from China, driven by potential tariff increases by incoming Trump- administration, is likely to lure some of these U.S manufacturers to the project. 
According to Ferentino Tyre Corporation CFO Sujith Jayasundara, the second phase would enable Ferentino to reach US$ 300 million in export revenue per annum from current US$ 100 million.

“This will be a considerable amount to Sri Lanka’s economy in ushering in much-needed foreign exchange,” he said.

In particular, the second stage of this project would enable Ferentino to meet specification of tyres for different markets.

So far,  the company has invested in the tune of US$ 275 million in the first stage of the project. The plant currently has a capacity to produce around 2.5 million passenger car radials (PCR) per annum, including a specialised category for SUVs. Focusing on requirements of the domestic market, it also has a capacity to manufacture 500 industrial tyres for buses and trucks per day and 3500 tyres for two-wheelers.

The project is the brainchild of entrepreneur Nandana Lokuwithana, who heads the UAE-based Onyx Group and Ceylon Steel Corporation.

The United States, Brazil and Europe are the key export markets for Ferentino at the moment. The company has adopted three different strategies to penetrate into these markets. In the United States, Ferentino has set up a retail business by establishing warehouses and assembling local teams in five States (California, Texas, Georgia, Massachusetts and Indiana). 

“We started with 10 containers initially, then it rose to 20 containers, 30 containers…etc and reaching 60 containers per month as of present,” Jayalath noted.

The company is targeting to increase the number of export containers to 150 per month within this year.
“Ferentino has reaffirmed its commitment to the domestic market, responding to a request from the new administration. The company aims to meet local tyre specifications and pricing while maintaining its global brand quality. With over 75 tyre brands currently competing in the Sri Lankan market, most of which are imported, this move will contribute to reducing the foreign exchange outflow.

“We need to look at how this global brand can be localised,” Ferentino officials said.

Meanwhile, Jayalth cited high energy cost and power disruptions as key challenges for running smooth operations at present.