Apollo Chairman Speaks on ‘Signs of Revival’

While addressing shareholders at the Apollo Tyres Annual General Meeting, company chairman Onkar S Kanwar expounded upon what Apollo has gained and learned in the past year. His topic, titled ‘Navigating a Slowdown’, centred upon the company’s business model, which according to Kanwar has enabled Apollo to remain afloat during the recent slowdown.

This business model, Kanwar explained, covers Apollo’s three main principles: domestic markets, cost and quality initiatives. Sticking to this tried and tested business model has paid dividends during the past twelve months, he added. “Last year’s crisis has allowed your company the opportunity to break structures and behaviours that sap productivity and effectiveness out of organisations. It has allowed your company to realign itself to a new reality.

“This year gone by has been one of the most difficult that any of us has seen in our lifetimes,” the chairman stressed. “The world has gone through a global contraction that our free market system has not encountered since the Second World War. It is estimated that the world has lost as much as four trillion dollars last year, with global GDP shrinking by two per cent. Across the globe, people have lost jobs, and companies which had seemed as vibrant as any other have had to close down.” Kanwar added that India, which was expected to grow at a rate of nine per cent, was “very fortunate” to have attained 6.7 per cent growth in such bleak conditions.

By adhering to the three principles outlined above, Kanwar noted, Apollo has been the only Indian tyre manufacturer to have remained profitable across each quarter of the past year. “We are gaining the distinction of being a company that is a force to reckon with,” he added. Regarding Apollo’s commitment to domestic markets, Kanwar referred specifically to the acquisition of Vredestein Banded (now renamed Apollo Vredestein BV) earlier this year. “For your company, this is one of the biggest challenges it has taken on,” said the chairman. “Europe is the world’s most demanding and evolved tyre market, and to gain a foothold here will be a creditable achievement.” Kanwar added that from this key domestic market, along with India and South Africa, Apollo will continue to expand and “fully leverage its strengths across geographical boundaries.”

Mr. Kanwar also discussed other Apollo Tyres projects, including the greenfield passenger car tyre factory under construction near Chennai, in India’s southeast. He stated “we expect the first tyres to roll out from here by the end of this calendar year.” This would, he added, make Apollo the largest producer of passenger car tyres in India. Kanwar also mentioned that the OTR tyre facility in Gujarat state, built in partnership with the public sector earthmover manufacturer BEML, entered operation in March and is currently producing tyres for mining and construction applications. Investment at both of these facilities are ongoing, Kanwar confirmed, and Apollo is enhancing capacity at plants in India, the Netherlands and South Africa.

“While no one can predict for sure when we will be able to revert to our earlier growth forecasts, there are signs of revival,” Mr. Kanwar stated. “Despite the tremendous challenges arising out of the global and domestic economy, the journey ahead for your company will be nothing less than exciting.”