Tyre major, Ceat, on Sunday laid the foundation stone of its Rs 700-crore new radial tyre plant at Halol, about 45 km from Vadodara in Gujarat.

After laying the foundation stone the Gujarat Chief Minister Narendra Modi said the state could become an auto hub in next three to five years. Apart from the presence of General Motors and Asia Motor works, foray of Tata Motors will make Gujarat a large volume player attracting good number of auto-component manufacturers, he said.

Modi asked Harsh Goenka, Ceat Vice Chairman, to invest in the entertainment sector and revive Lucky Film Studio located in Halol, which is shut now.

“With Gujarat emerging as the next auto corridor of India, Ceat is confident this plant will give us the added mileage for increasing our market share,” Harsh Goenka said in a statement.

The investment in the plant, which is a greenfield project would be done in two phases.

The company would invest Rs 500 crore in the first phase (2009-10) while Rs 200 crore would be invested in second phase (2011-12), the statement said.

Spread across 125 acres of land, the plant is expected to manufacture four million tyres in phase I and subsequently its capacity would be increased in the next 10 years, it said.

The plant would manufacture radial tyres for trucks, buses, light trucks and passenger cars and a substantial portion (25-40) of the production would be exported, the statement said.

The plant is expected to provide employment to over 1,000 people in the first phase of operations, it added.