CEAT inks landmark US$ 171mn deal with BOI, boosting Sri Lanka’s manufacturing sector

 BOI Chairman Arjuna Herath, CEAT Limited CFO Kumar Subbiah and CEAT Specialty Chief Executive Amit Tolani with senior representatives of the BOI and CEAT OHT Lanka at the signing of the BOI agreement

• Agreement formalises one of the largest Indian investments in Sri Lanka’s manufacturing sector
• Investment will expand Off-Highway Tyre (OHT) and Tracks manufacturing capacity in Sri Lanka
• Job security assured for 1483 employees through tripartite MoU

CEAT OHT Lanka (Private) Limited has formalised a US$ 171 million investment with the Board of Investment of Sri Lanka (BOI), marking one of the largest recent investments from India into the nation’s manufacturing sector. 

The landmark agreement is set to significantly expand Sri Lanka’s manufacturing capacity for Off-Highway Tyres (OHT) and Tracks, reinforcing the country’s position as a competitive global export hub.

The investment will be channeled into facilities located in Midigama and Kotugoda, which will concentrate on the export-led production of tyres and tracks designed for compact construction equipment. 

This strategic move follows CEAT Ltd.’s acquisition of Michelin Group’s Construction Compact Line Business, which included these Sri Lankan plants. As part of the transaction, CEAT will gain global ownership of the Camso brand, which will be permanently assigned to the company after a three-year licensing period.

A key component of the agreement is a focus on employee welfare and job security. A Tripartite Memorandum of Understanding has been signed between CEAT OHT Lanka, Michelin Lanka, and the Inter-Company Employees Union (ICEU), ensuring job security for approximately 1,483 employees.

The MoU guarantees that there will be no retrenchments. Furthermore, it ensures the full retention of employees’ past service records, seniority, current salaries, and benefits, providing stability and continuity as the operations transition to new ownership.

CEAT Ltd Chief Financial Officer Kumar Subbiah emphasised this commitment, stating, “Our immediate priority is ensuring a seamless transition while safeguarding jobs and strengthening our operations in Sri Lanka”.

Officials from both the BOI and CEAT hailed the agreement as a pivotal development for Sri Lanka’s economic future.

BOI Chairman Arjuna Herath welcomed the deal, stating, “This approval underlines our confidence in CEAT’s vision and will further elevate Sri Lanka’s position as a global manufacturing and export hub”.

The investment is aligned with the BOI’s mandate to attract high-value foreign investment to drive sustainable economic development.

CEAT Specialty Chief Executive Amit Tolani noted that the approval marks a “new chapter” in the company’s partnership with Sri Lanka and that the investment will play a central role in CEAT’s future growth while creating new opportunities for the country. This agreement embeds Sri Lanka at the core of CEAT’s international expansion strategy as it reinforces its position as a global player in the high-margin OHT and tracks segment.