Service Industries Limited is looking to set up a green field project to undertake manufacturing & sale of truck & bus radial category of tyres in Pakistan.
In a notification to the PSX, the company announced that the board of directors have resolved that the company will enter into Joint Venture Agreement amongst Chaoyang Long March Tyre Co. Ltd and Myco Corporation of Pakistan for setting up a green field project.
It will undertake the manufacturing and sale of truck and bus radial category of tyres in Pakistan to serve the progressive demand of the local market as well as its exports to the other countries.
Th notification further read that, the equity stake of the parties in the JVC will be as follows:
- Service Industries Ltd – 51% (With or without collaboration of associates/others)
- Chaoyang Long March Tyre Co Ltd 44% (Maximum 49%)
- Myco Corporation of Pakistan 5% (any shortfall will be contributed by Chaoyang Long March Tyres)
The JVC will be incorporated under the name of Service Long March Tyres Private Ltd. Furthermore, the Board resolved to make long term equity investment of up to USD $30.6 million in equivalent Pakistani Rupees in the above mentioned Joint Venture Company, from time to time within a period of 3 years.
After the announcement, Service’s shares went on to hit the upper circuit breaker of the day, as it went up by 5% or Rs. 37.79 to Rs. 793.70 with a volume of 6800 shares on Friday.
Service Industries Ltd’s principal activities include purchasing, manufacturing and sale of footwear, tyres and tubes and technical rubber products.