Karachi March 10 2022: Service Long March Tyres (Private) Limited (`SLIVI) an associated company of Service Industries Limited (the ‘Company’) has successfully commenced the commercial production of All Steel Radial Truck and Bus Tyres with effect from
10 March, 2022.
The Company along with its subsidiary company, Service Global Footwear Limited, holds 51 percent equity stake in SLM with the segregation of 32.09 percent equity stake of Service Industries Limited and 18.91 percent equity stake of Service Global Footwear Limited.”
SIL has ventured into the manufacturing of “All Steel Radial” tyres of trucks and buses (TBR Tyres) (the “Project”). For this purpose, SIL has entered into a Joint Venture Agreement with Chaoyang Long March Tyre Co., Ltd (“LM”) and Myco Corporation on November 18t.h 2019 and have set up a Joint Venture Company in Pakistan namely “Service Long March Tyres (Private) Limited” (“SLM”) on January 07, 2020.
LM is a Chinese tyre manufacturer based in Chaoyang, Liaoning province and was established in 2003. LM possesses a core expertise in manufacturing of “All Steel Radial” (TBR Tyres). LM’s current production capacity is of around 3.4 million tyres per annum. LM manufactures a total of 236 varieties across 59 specifications and 50 patterns for light, medium & heavy truck and bus tyres. Almost 55 percent of total production is being exported to a total of 130 countries mainly to Chile, UAE, African region, Australia, and Pakistan.
Myco Corporation is a sole proprietorship owned by Mr. Shabir Ahmad, son of Haji Gul Muhammad. Myco Corporation is the exclusive distributor of Chaoyang Long March Tyre Co. Ltd, China, in Pakistan and is engaged in the import and sale of “All Steel Radial” tyres of trucks and buses (TBR Tyres). The Project cost is estimated to be PKR 16,430 Mn which would be funded in a debt to equity ratio of 50:50 with an installed production capacity of 600,000 tyres per annum. Total debt requirement of PKR 8,215 Mn has been arranged through long term financing facilities from different financial institutions. Of the total equity commitment of PKR 8,215 Mn, PKR 4,500 Mn has already been injected by SIL, LM, and Mr. Shabir Ahmad of Myco Corporation in the ratio of 51 percent, 44 percent, and 5 percent, respectively.
SLM would manufacture “All Steel Radial” tyres of trucks, buses (TBR), light truck and off the road vehicles for local and export markets; however, initially during the Phase 1, SLM would restrict manufacturing to trucks and buses (TBR tyres) only. As per the estimation of SLM’s management, 85 percent of the total sales would comprise of exports. Currently there is no local player operating in this segment of tyre market and SLM would be the first player in the local industry to bring TBR manufacturing technology in Pakistan. The entire manufacturing technology would be transferred from the Chinese Partner, LM. Other tyre manufacturers in the country such as General Tyre & Rubber Company of Pakistan Limited and Panther Tyres Limited do manufacture bias tyres for trucks and tyres but SLM would be the sole manufacturer of All Steel Radial tyres of trucks and buses in the country.
All Steel Radial Tyre of Trucks and Buses (TBR Tyres): All Steel Radial Tyre is a category of tyres in which full tyre body is made of steel material whereas ordinary radial tyres use a combination of textiles and steel cords for the tread areas only which leaves the sidewalls of ordinary radial tyres vulnerable. All Steel Radial tyres use steel cords in all areas including the radial plies to protect the sidewall casing as well as the tread area.
All Steel Radial Tyre is the latest technology being used in the world at the moment for manufacturing of heavy transport vehicle tyres. The machinery line used in the manufacturing of All Steel Radial Tyre is different from the machinery line used in the manufacturing of bias and semi-steel radial tyres. The quality, usage life, and the reliability of All Steel Radial Tyre is much higher than those of the other two categories of tyres. Moreover, this category of tyres are also highly safe as compared to other two categories of tyres. Aforementioned characteristics enable this category of tyres to meet high performance parameters of heavy transport vehicles where tyres have to withstand high load at high speed since the entire body (casing) of the tyre is made of steel.
