“Export Markets an Integral Part of Our Business” – Apollo’s Kanwar

In these froward economic times, it is difficult to make plans. Apollo Tyres, however, appears to be pressing ahead with its inroads into European markets. The company’s chairman and managing director Onkar Singh Kanwar recently spoke to India’s largest financial daily, The Economic Times, and explained why exports are so important for Apollo at present.

“The passenger car segment (in India) has been badly impacted,” related Kanwar. “As car sales have plummeted, tyre sales have also gone down proportionally. Apollo Tyres however has managed to maintain a growth of 22 per cent despite the overall scenario, as exports have helped in tiding over this period so far.” He added that, in this most recent financial quarter, exports grew by 37 per cent year-on-year.

“Exports are an integral part of our business,” Kanwar added. “Our acquisition of Dunlop has given us an edge over other players for we are able to cater to the western market and South African market with those products, and our Apollo brand products have conventionally catered to the Asian market. As a company there is a major thrust towards expanding our export portfolio, but at the same time we need to do well on the domestic front. Having said that, we do have plans to use our facilities to cater to a growing export demand in the future.”

A major potential export market for Apollo is of course Europe. The company subsidiary Apollo Tyres GmbH was founded last year, and in December 2008 it moved to new offices near Frankfurt, Germany. Talking about the tyre maker’s plans for the region, Kanwar says they are “on track and we are currently working on preparing the products for the European market. The Chennai facility (located in the eastern India state of Tamil Nadu) will also cater to this line of products. Our prime focus right now is to develop a range of snow tyres as well as 4×4 tyres, as we see good demand for such products in Europe. We are preparing tyres in European sizes and our Research and Technology centre in Germany is behind the hard work on these new products.

“We have already tested our products on testing tracks in Europe and the results show that we are more than capable of making great tyres for that market,” Kanwar continued. “The tyres will be branded as Apollo Tyres and this will mark our foray into the European market in a big way. We are quite bullish of the prospects.” According to Mr. Kanwar, Apollo has already been appointed a global tyre supplier by Volkswagen. The new Polo, which debuts shortly in India, will be fitted with the company’s tyres.

Despite the global slowdown – it has been reported that Apollo will be laying of as many as 1,500 workers in India – the company is proceeding with a number of expansion plans. “The slowdown has resulted in us tightening our belt and building on our efficiencies,” Kanwar admitted. “Yes, we have had to downsize on some contract and casual labour at some of our facilities, but other than that we intend on riding through this phase by enhancing our efficiencies. Our growth plans are on target and this too will boost our capabilities in the coming years. Our plants are working on a 24×7 basis as well.” Specifically, says Kanwar, these growth plans include the establishment of an Rs 6 billion (£85 million) greenfield facility in Chennai, which should be complete in 2010. The company’s Baroda facility in Gujarat is also being expanded at an investment of Rs 2.5 billion (£35 million), and will be ready by March 2009.