MRF Raises Prices, Warns of Further Increases

Indian tyre major MRF has raised the prices of truck tyres and some other tyre sizes in an attempt to offset the impact of high rubber prices, but a senior company official has indicated that this increase is still not sufficient. Prices will rise by one per cent, but the company reportedly may again increase prices at the end of February, following the presentation of India’s federal budget.

“The (current) increase is not enough to cover the rising cost,” said Philip Eapen, MRF’s executive director for marketing. Although rubber prices eased in late 2006, the price increases for this essential commodity have eroded the company’s operating margins. Raw materials, predominantly rubber, make up about 70 per cent of the cost of each new tyre.

MRF’s rival’s Ceat Ltd. has also stated it is evaluating whether or not to increase its own prices.