By: Staff Writer
August 25, Colombo (LNW): CEAT OHT Lanka Ltd. yesterday announced that it has signed an agreement with the Board of Investment (BOI) of Sri Lanka to formalise a landmark investment of $171 million, one of the largest inflows from India in recent years, aimed at strengthening the island’s manufacturing and export profile.
The investment follows CEAT Ltd.’s global acquisition of Michelin Group’s Construction Compact Line business, including the Midigama plant and the Casting Product facility in Kotugoda.
With this, CEAT will assume worldwide ownership of the Camso brand after a three-year licensing period. The acquisition process is still being finalised but is set to embed Sri Lanka at the centre of CEAT’s global Off-Highway Tyre (OHT) expansion strategy.
The company emphasised that Sri Lanka’s role as an OHT hub will be reinforced by this move, even as the country struggles with inconsistent government policies and a lack of private-sector facilitation.
Industry stakeholders note that while the tyre sector has shown resilience, rising input costs, energy prices, and the absence of a coherent industrial strategy have placed significant strain on private manufacturers—traditionally recognised as the engine of economic growth.
As part of its long-term commitment, CEAT OHT Lanka has signed a tripartite Memorandum of Understanding (MoU) with Michelin Lanka and the Inter Company Employees’ Union (ICEU) to safeguard the future of 1,483 employees. The MoU guarantees full retention of service, seniority, benefits, and salaries, ensuring no retrenchments during the transition.
BOI Chairman Arjuna Herath welcomed the investment, stating: “This is among the largest Indian investments in recent years and strengthens Sri Lanka’s position as a global export hub.”
CEAT Specialty CEO Amit Tolani described the agreement as a “new chapter” in the company’s partnership with Sri Lanka, adding that the investment would create “exciting new opportunities” for the local industry. CEAT CFO Kumar Subbiah reiterated the company’s commitment to a seamless transition, job security, and positioning Sri Lanka as a “world-class OHT manufacturing hub.”
Despite such milestones, analysts point out that Sri Lanka’s tyre industry—spanning passenger, truck, bus, and specialty tyres—continues to face bottlenecks, particularly in accessing raw materials, competing with cheaper imports, and managing high operational costs.
While private investors such as CEAT have injected capital and global expertise, the government has been criticised for offering little policy clarity or incentives to sustain competitiveness.
CEAT’s latest venture highlights how foreign direct investment can accelerate industrial growth and exports, but also underscores the urgent need for the government to create a more supportive ecosystem for the private sector, which remains the backbone of economic recovery.
