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JV Partner Sought for India’s TCI

The Indian government’s wholly owned and ailing tyremaker, Tyre Corporation of India (TCI) is looking for a joint venture partner to help revive its fortunes. India’s Economic Times newspaper has reported that the government plans to attract a partner that can provide both the latest global technology and pan-India product marketing support.

An official from India’s Ministry of Heavy Industries told the Economic Times: “The matter now lies with the Parliamentary Standing Committee on Industry for a final approval, after a bill (the Disinvestment of Ownership Bill, 2007), was introduced in parliament in May. As and when it is passed, we would move ahead with the revival of the sick unit, through the disinvestment route.”

20th July 2007/by Tyrepress Editors

Pirelli Committed to Emerging Markets

At a July 19 ceremony marking the manufacture of their millionth high performance tyre in Romania, Pirelli presented news of its current activities and development plans for the company’s tyre and other vehicle related products. Present for the occasion were, amongst others, Marco Tronchetti Provera, chairman of Pirelli & C. SpA, Francesco Gori, managing director of Pirelli Tyre, plus a number of local authorities.

Marco Tronchetti Provera disclosed to reporters that Pirelli intended to go “where the growth is” when investing in new tyremaking facilities. “We are looking with interest at India,” he said. “We are looking at Russia as an interesting market.” It is believed that Pirelli would prefer to establish itself in these markets from scratch without acquiring established domestic operations.

20th July 2007/by Tyrepress Editors

Conti Boosts Presence in Emerging Markets through Acquisition

Continental’s Automotive Systems Division is bolstering its brakes systems capabilities in both Europe and in emerging markets, particularly Asia, through the acquisition of drum brake manufacturer Automotive Products Italia S.r.l. from the Australian Pacifica Group Limited. Based in Cairo Montenotte, in the Italian province of Savona, Automotive Products Italia employs approximately 500 people and since its establishment in 1984 has grown into a business with annual sales (2006) of 79 million euros.

This acquisition is not the beginning of relations between Automotive Products Italia and Continental Automotive Systems – the two parties have been involved in a technical and marketing cooperative agreement for the past decade. Automotive Products Italia has grown to become Europe’s second largest producer of drum brakes; approximately 5.8 million drum and park brakes were manufactured at the company’s 17,000 square metre facility in Savona last year, and counted amongst the firm’s OEM customers were major manufacturers such as Fiat, Ford, Renault/Nissan, Toyota, Land Rover, Mazda and General Motors. Upon regulatory approval the company will be integrated into the Hydraulic Brake Systems business unit of Continental Automotive Systems.

19th July 2007/by Tyrepress Editors

JK Tyre Aiming to Increase Turnover by More than 50%

It is hoped that JK Tyre and Industry’s Rs 11 billion (£135 million) capital expenditure and capacity increase from 9 million to 12 million units will help towards the company achieving a turnover of Rs 50 billion (£610 million) within three years, claims chief financial officer A K Kinra. Mumbai based publication DNA has reported Kinra as stating “We are aiming to grow by 20 per cent annually over the next 3-4 years. We hope to be a Rs 5,000 crore (£610 million) company by 2010.” Currently JK Tyre has an annual turnover of Rs 30 billion (£366 million).

Kinra added that the current slowdown in India’s car industry was not of concern to JK Tyre as OE contracts only make up about 10 per cent of the tyremaker’s business, with the rest coming from the replacement and export markets. “The slowdown has only a marginal impact on us. In the aftermarket space, we see a robust demand,” he said.

13th July 2007/by Tyrepress Editors

Metro Tyres to Offer Share to Conti

India’s Metro Tyres is reportedly willing to offer technical collaboration partner Continental a minority stake in its business. According to an article published in the Indian financial daily Hindu Business Line, Metro Tyres group managing director Rummy Chhabra said that a share of the company could be offered to Continental when Metro’s planned IPO – from which the company hopes to raise about Rs 1 billion (£12 million) – takes place in 18 months’ time, or possibly even beforehand.

Metro plans to increase their presence in Europe and Continental’s assistance has been invaluable to this end. Mr Chhabra said Continental was willing to help Metro enter its home European market as both companies’ products complement each other. “While we address the budget segment, Continental plays in the premium end of the market. Hence our products do not overlap each other.” The Indian tyremaker has already opened an office and warehouse in Barcelona, from where it will market its Ortem brand tyres and tubes to European markets. Mr. Chhabra said the company expects European sales to contribute up to £10 million to its total revenue during the first year.

13th July 2007/by Tyrepress Editors

Former BKT CEO & Equity Firm Buy Alliance Tire

Former Balkrisha Tyres CEO Yogesh Mahansaria and global private equity company Warburg Pincus have jointly acquired Israel’s Alliance Tire Co. for approximately US$150 million. The new owners intend to establish a greenfield facility in India to complement the agricultural and OTR tyre specialist’s existing Israel based production, with the facility in India serving as a site for the low cost sourcing of products.

Joseph Anglister, president of Alliance Tire said “we welcome the new ownership. An investment by a leading international investor such as Warburg Pincus combined with Yogesh Mahansaria’s extensive experience in the off-highway tyre industry will provide an impetus to our long-term objective of growing Alliance’s product library, strengthening our relationship with existing customers and tapping new markets.”

12th July 2007/by Tyrepress Editors

Metro Tyres Looks Towards EU for Expansion

Motorcycle and bicycle tyre manufacturer Metro Tyres has discussed plans to expand into European markets. The Punjab, India based manufacturer entered into a technical collaboration deal with Continental in January and is now in the process of preparing for the unveiling of its European distribution cell. Conti will also source bicycle tyres from the company.

“European markets hold much bigger potential for the company as far as cycle and bike tyres are concerned,” said Metro Tyres managing director Rummy Chabbra. He further commented that Metro Tyres currently holds 24 per cent of the bicycle and 3 per cent of the motorcycle tyre market in India. The company aims to capture a 10 per cent share in the motorcycle sector with the next two years.

11th July 2007/by Tyrepress Editors

All Steamed Up

Apollo Tyres has signed an agreement with Gail India Ltd., India’s largest natural gas company, to cooperate in a ‘steam conversion project’. The deal, signed on July 10, not only falls under the Kyoto Protocol’s Clean Development Mechanism (CDM) criteria but will also lead to lower gas consumption and increased energy efficiency for Apollo.

The agreement was signed by Apollo chief – legal Shri Mahesh Sharma and Gail director of marketing Shri B C Tripathi at Gail’s office in New Delhi. Also present for the occasion were numerous senior officials including Gail chairman and managing director Dr. U D Choubey, Apollo chairman and managing director Shri Onkar S Kanwar, and Dr. Amit Mitra, Secretary General of the Federation of Indian Chambers of Commerce and Industry.

The project will be implemented by Gail at its Vaghodia Compressor Station in the western state of Gujarat and will provide steam to Apollo within 24 months at a cost of around £4.3 million. The duration of the Agreement is 15 years and commercial supply will start from July 2009, with an annual contracted quantity of 436,800 tonnes.

11th July 2007/by Tyrepress Editors

‘Source’ Reports Bridgestone India Expansion Plans

According to news published by leading Indian business daily Business Standard, Bridgestone India intends to invest Rs 2.63 billion (£32.3 million) expanding capacity at its facility in the central state of Madhya Pradesh. This expansion will reportedly include capacity for a new radial range. This would be the fully-owned subsidiary’s first major expansion since 1998, and Business Standard claims to have viewed documents indicating the company plans to increase existing capacity by between 4,000 and 6,500 tyres per day. 271 jobs will reportedly result from this expansion.

“The company has said that it has planned to complete the expansion by December 2008 to add another 1.5 lakh nos [150,000] of tyres for all vehicles per annum,” printed the Business Standard, reportedly quoting a government source. However the previously mentioned documents indicate a capacity increase of ten times this amount.

10th July 2007/by Tyrepress Editors

Hangzhou Tyres OE in India

Tyres produced by Hanzhou Zhongce, the Chinese manufacturer at the centre of a half a million-unit recall in the US, are supplied OE clients such as Tata Motors in India. “Tata Motors is satisfied with the quality of tyres from China, and has not faced any issues,” a Tata Motors was quoted as saying. The tyres involved in the US were radials, while Tata Motors imports only bias tyres, one Indian news source reported.

Indian tyre manufacturers told dnaindia.com that while Hangzhou Zhongce Rubber has the technology to manufacture quality products – it contract manufacturers for other global brands like Goodyear and Cooper – many smaller Chinese companies dump substandard products in the Indian aftermarket.

“It’s a little scary, given our lack of safety regulations or data on fatality rates due to tyre failure. Chinese imports between April and December 2006 were over 500,000 units compared to 300,000 in the entire 2005-06,” said a senior official of a local tyre manufacturer.

9th July 2007/by Tyrepress Editors

JK Tyre Sheds Further Light on Expansion Plans

JK Tyre has released additional details of the company’s expansion plans, and it appears far more money than previously reported will be invested in increasing production capacity. The Indian tyremaker plans to inject Rs 11 billion (£135 million) into capacity expansion during the next three years. According to India’s Economic Times, JK Tyre finance director A K Kinra has stated that both capacity for OTR tyres and for radials will be expanded in order to meet with increased demand – passenger radial capacity will be increased from its current 4.5 million units to 7 million units, and TBR capacity will be boosted from 400,000 to 1 million units per annum – and the planned expansion projects will be funded through a combination of loans and internal accruals.

Kinra added that growth in these three sectors will form the basis of JK Tyre’s future expansion, and he expects the company to achieve a revenue of Rs 50 billion (£615 million) within a three-year window. The previous financial year saw the company achieve revenues of £365 million.

9th July 2007/by Tyrepress Editors

Apollo International Gains WEF Membership

Apollo Group export company Apollo International Ltd. (AIL), sister company to Apollo Tyres, has been inducted into the World Economic Forum’s Community of Global Growth Companies. AIL was selected after meeting the World Economic Forum’s stringent parameters and the company has stated its initial involvement will be participation in the inaugural annual meeting of the ‘New Champions’ to be held in China’s Dalian from 6 to 8 September.

“We feel privileged to have been identified as a Global Growth Company by the World Economic Forum,” said AIL managing director Raaja Kanwar. “The Forum will provide us with the platform for interaction and collaboration with other members companies and sharing of ideas of business opportunities. This will also help us in furthering our vision of nurturing entrepreneurs through partnership.”

Apollo International exports tyres through its Tyre Tech Global division, which is also the technology transfer of tyre manufacturing capabilities to other countries. Tyre Tech Global is headquartered in Gurgaon, India and has offices in Hong Kong, China (Qingdao), Dubai and Canada.

6th July 2007/by Tyrepress Editors

Dunlop India Planning to Produce Aircraft Tyres

Despite the recent troubles that have plagued Dunlop India, the company is remaining positive and has announced that, as part of an initiative to revive its fortunes, the company will begin manufacturing aircraft tyres and industrial products at its Sahaguni and Ambattur factories in September. Production at both factories is currently halted, allegedly due to a shortage of working capital.

“We will start manufacturing industrial products like conveyor belts and other products used in steel and other industrial plants and these will be part of the revival programme,” reported Dunlop India vice-president Dhrubojyoti Nandi. “The production will start in September, when both the factories in Sahagunj and Ambattur resume full operation.”

6th July 2007/by Tyrepress Editors

Higher Anti-Dumping Duties Recommended in India

An Indian government panel has recommended increasing the anti-dumping duty imposed on truck tyres from US$99 to $135. Originally implemented last October, the duty is intended to curb the large numbers of low-priced Chinese imports flooding into India. At present tyre imports from China are running at 68,000 units a month, a five-fold increase in the levels recorded three years ago.

The difference in price between Indian tyres and their Chinese equivalents is approximately 25 to 35 per cent despite the Chinese government’s removal of its 5 per cent tyre export subsidy and increased freight charges for exports to India. Such a gulf in prices means, according to MRF executive director of marketing Philip Eapen, that the increase in duty will make little difference apart from making Chinese imports a “little more unattractive.”

5th July 2007/by Tyrepress Editors

Birla Tyre Planning Greenfield Project

B K Birla Group chairman Basant Kumar Birla has announced plans for an £85 million greenfield tyre factory in the northern Indian state of Uttarakhand. The plant, to be built near the city of Haridwar, where the company has already acquired a 42 hectare site, will have a production capacity of 1.7 million passenger car tyres per year. The plant is anticipated to be ready within the next two years and is to be funded through internal accruals and loans.

Birla Tyres entered the Indian market in 1991 and today is India’s fifth largest tyremaker, with production facilities in the eastern state of Orissa. The plant in Balasore, Orissa was set up with technical assistance from Pirelli UK, and has an annual production capacity of 1.5 million tyres, including passenger car and light commercial radials as well as bias car, truck and agricultural tyres. Birla Tyres states that its products are exported to 43 countries.

4th July 2007/by Tyrepress Editors