India
The Kakinara, West Bengal facility belonging to the Tyre Corporation of India has been affected by fire. According to the Times of India newspaper, a fire broke out in the factory’s mixing plant on January 14 and ten fire engines have been at the scene attempting to control the blaze.
The extent of the damage has not as yet been disclosed.
The third Rubber & Tire Asia/China Markets conference will discuss how the Indian and Chinese/Asian markets should deal with escalating natural rubber prices, the need to reduce the so-called CO2 shock and other environmental issues. Some of companies represented included Lanxess, Michelin, The Thai Rubber Association, Bekaert, South China/Wanli Tires, Pouchen Corporation, and JK Tires. The conference will be held on 28-29 February in Bangkok, Thailand.
With natural rubber (NR) and synthetic rubber (SR) prices continuing to persist, Thailand remains the top global rubber producer, with India following closely behind. Meanwhile, the tyre industry remains the core application for butyl rubber, consuming 86 per cent of the global supply. It is estimated that by 2010, global annual tyre production will reach 1.7 billion, up from 1.4 billion in 2005. Most of that growth in Asia will come from South China/Wanli Tires and JK Tires have been invited to share their insight on local market developments.
The Ninth Auto Expo in New Delhi was selected as the venue for the January 10 launch of the world’s cheapest car, India’s Tata Nano. In its most basic form the Nano will retail for Rs 100,000 plus taxes. That’s around £1,300, less than one-third of the cost of the cheapest model sold in the UK. What buyers get for their rupees is a fairly spartan vehicle – the entry level Nano features no radio, air conditioning, power steering or any related luxuries, and comes fitted with a single windscreen wiper and a driver’s side only door mirror. But despite the lack of frills, the car is a genuine four-seater, and its two cylinder 623cc engine is said to deliver 33 hp and 5 litres/100km fuel economy. Furthermore, Tata reports that the Nano exceeds current safety and environmental standards.
PCL’s Indian joint venture (PCL-Sumo) has announced the appointment of Uday Bhaskar as its new Chief Executive Officer. He will lead the company’s Mumbai-based team providing sales and support service for PCL’s tyre inflation and pneumatic products on the Indian marketplace. The alliance of PCL and Sumo Hi-Tech Marketing Pvt Ltd. has allowed Indian customers instant local access to a vast resource of experience, products, local training and international support, all delivered with an in-depth knowledge of the Indian market.
Apollo Tyres Ltd has named Satish Agarwal as chief of manufacturing. Mr Agarwal joined the company in November 2000 as Unit Head for Apollo Tyres’ flagship manufacturing facility in Limda, Gujarat. According to the company, he has “transformed” this facility into India’s largest tyre manufacturing plant, during the past seven years. As a result, Apollo representatives describe the plant as having “one of the best manufacturing efficiencies in the industry.” In his new role Mr Satish Agarwal, will be based at the company’s headquarters in Gurgaon, outside New Delhi city. He will be responsible for all manufacturing operations and functions, including Quality, Corporate Engineering and Cost Optimisation, across plants in India, South Africa, Zimbabwe and other future facilities. He will be reporting directly to Mr Neeraj Kanwar, Joint MD and COO, Apollo Tyres Ltd.
Continental AG is looking to boost its India operations and broaden the range of products on offer to customers in the region following its recent buyout of Siemens’ VDO unit. One particular new investment Conti is making in India is its planned automotive electronics plant and R&D facility in Bangalore, which will be established with an initial investment of Rs 1 billion (£12.9 million). Joint venture facilities operated in conjunction with Rico and Ashok Leyland will also attract fresh investment in the coming years.
“In the next decade one of the main focuses of the automotive industry will be the so-called affordable cars, especially in the growth markets like India and China. The production of cars within a price range of Rs 5 Lakh (about £6,500) will increase from current figure of 650,000 to approximately 1.1 million units by 2017. This is a 70 per cent increase. To cope with this demand we have to focus on solutions for the Indian market; people want safe, yet affordable cars,” said Dr. Karl-Thomas Neumann, chief technology officer and board member of Continental AG. “Continental has developed strategies and products that are suited to these demands,” Dr. Neumann added.
Balkrishna Tyres is reported to be planning a new facility within the Special Economic Zone in Gujarat, northwest India. An investment of Rs 5 billion (£64.7 million) will go into the facility over a three-year period starting in the 2009 financial year, with the completed plant expected to have an annual output of 75,000 tonnes. The company’s head of finance, B K Bansal, told local media “we are analysing two to three Special Economic Zones in Gujarat and are in talks for acquisition of land, though nothing has been finalised as yet.”
According to a report in India’s Business Standard, Ceat Tyres has recently automated its business processes on the Software Application Protocol (SAP) platform. The SAP implementation covers the company’s entire office network, consisting of corporate office, two manufacturing plants, 34 regional offices, 28 RDCs, 125 clearing and forwarding agents, 3,500 dealers, a warehouse, 15 outsourcing locations, 8 RPD & Mixing locations.
Unlike most companies, who phase in new IT systems in stages, Ceat has opted to have all modules in its 180 plus locations go live at the same time. Ceat Tyres vice-president Arnab Banerjee explains the reason behind this decision: “If we look at the industry, most of our peers have used a phased approach. We were advised to follow it too. However, in this kind of implementation there is resistance to change and opposition to new systems and processes. So, we thought that instead of going through these issues in phases, let’s take the problem head-on and implement it in one go.” The project was implemented within a timeframe of eight months.
JK Tyre, India’s first TBR manufacturer, has responded to moves from other manufacturers to join this sector by boosting capacity at its facility in Mysore, southwest India, from 370,000 to 500,000 tyres per year, a target that will be met in 2009. Competition in this market sector is heating up in India: Apollo has already established a pilot TBR facility and during the coming quarter will consider the viability of further expansion. Ceat, who currently sources its TBR tyres from Pirelli factories and from manufacturers in China, have in recent months sought international technical assistance for the establishment of a domestic greenfield factory. According to the Hindu Business Line newspaper proposals for this project may be finalised in the next quarter. The paper adds that MRF has also announced plans to set up a TBR capacity.
Pawan Ruia, chairman of Dunlop India, has offered to set up an IT special economic zone (SEZ) on 50 acres of Dunlop land belonging to the Sahaganj factory labour colony. A similar offer has been made on 50 acres of Jessop land at Durgapur too. Ruia, chairman of both India’s first tyre maker Dunlop and oldest engineering company Jessop, said: “Sahaganj, located just 40 km from Kolkata, with an improved road connection can serve to disperse the IT concentration in Salt Lake-Rajarhat area.”
The proposal comes at a time when the state government is hard pressed to arrange land for IT majors like Infosys Technologies, Wipro, ITC Infotech. Dunlop’s land at Sahaganj covers 239 acres, of which only 51 acres accommodate the factory. According to local news sources Dunlop India is currently going through a “funds crunch” that has resulted in the state electricity board severing electricity in December with no word of when it would be resumed.
When Tyrexpo Africa 2006 got underway in September of that year, there was very little to compare the exhibition with – no tyre show had taken place in South Africa for more than a quarter of a century before ECI International took the decision to hold the inaugural event in Johannesburg. Therefore success was by no means assured; but pitted against this uncertainty was the fact that in Africa, and South Africa in particular, times were changing. By 2006 all of the major global OEMs were represented in South Africa, supplying the country’s growing automotive industry. Added to these tyre majors were some 450 tyre dealers and retreaders plus more than twenty thousand businesses supplying South Africa’s motor vehicle aftermarket. After such a long absence from the international tyre exhibition scene, perhaps the time was right for South Africa to make a comeback.
As it turned out, ECI International’s confidence in a show held on the African continent was fully justified. “In 2006, the first year of Tyrexpo Africa, we were going into unknown territory, but the response, support and enthusiasm we received convinced us that there is a real desire for a hard-working show aimed at bringing tyre people together,” explained ECI sales director Rowena Suthers. During the three day event a total of 2,738 trade professionals (the exhibition is strictly trade only) from 44 countries attended the show, and more than 110 companies exhibited their products. Feedback from exhibitors was highly positive, as comments from Bandag SA marketing director Laurent Colrat indicate: “Bandag SA committed to Tyrexpo Africa 2006 as early as October 2005 and it proved to be not only a good marketing decision but also a significant strategic move,” said Colrat. “The experience of the organisers was evident and Bandag SA will definitively be back for Tyrexpo Africa 2008.” True to Colrat’s word, Bandag SA is listed amongst the hundred plus exhibitors that by November 2007 had already committed to the upcoming show. The retreader celebrates the 50th anniversary of its founding in December 2007, and the company plans to mark this milestone at Tyrexpo Africa.
The Sandton Exhibition Centre is once again the venue for Tyrexpo Africa, and due to exhibitor space being fully booked during 2006 two halls have been set aside for the 2008 show. The success of the previous Tyrexpo Africa has done much to establish industry support for the exhibition within the region, and ECI are confident that the final run-up to the show will see even more companies come on board as exhibitors. Tyrexpo Africa 2008, in the words of Ms Suthers, “will have many more exhibitors and visitors, offering a wider range of products and services and more opportunities to do business.”
Counted amongst those already signed up at the start of November 2007 were numerous familiar names. India is well represented at the exhibition, with Apollo Tyres, Balkrishna Tyres, JK and retreader Elgitread all confirmed to attend. And an interesting phenomenon noted by ECI is a marked increase in the number of Chinese companies exhibiting. Already the number of Chinese manufacturers and distributors registered for this year’s show is up 20 per cent on 2006. More than 30 Chinese companies will be at Tyrexpo Africa, including Techking Tires, Hangzhou Zhongce Rubber and Qingdao Qizhou Rubber; this third company is currently developing a 59/90R63 OTR tyre, said to be the world’s largest. Whether or not this giant tyre will be present at Tyrexpo Africa is not known, but should it make its way to the Sandton Exhibition Centre it will be in good company – ECI report that a number of Chinese companies exhibiting will be targeting the mining, quarrying and construction markets with their OTR and earthmover products.
It is no surprise that manufacturers and distributors will be promoting OTR products at a South Africa based show – after all, the country possesses the world’s largest reserves of chrome, gold, vanadium, manganese and platinum group metals, and mining accounts for 6.5 per cent of South Africa’s gross domestic produce. But it is not just the mining sector that is strong here. The National Association of Automobile Manufacturers of SA reports that sales of heavy trucks between January and October 2007 increased 21 per cent over the previous year, and medium trucks by 13.4 per cent. And while sales results for new passenger cars have varied in the last few years, oscillating between record figures in 2004 and 2005 and the current decline, vehicle production is now South Africa’s second largest manufacturing sector industry. Vehicle exports have increased nine-fold since 2004, now accounting for almost 7 per cent of national exports. Naturally, the demand for tyres and related automotive products is experiencing a growth in-line with that of vehicles in these key sectors, and where there is growth, new opportunities also exist – opportunities that can be acted upon at a show such as Tyrexpo Africa.
For those wishing to develop business relationships with tyre manufacturers, wholesalers and distributors operating in Africa the exhibition in Johannesburg provides something that cannot be found anywhere else throughout the continent – a venue in which one can compare what’s on offer side by side and make an informed business decision. “That’s what Tyrexpo Africa is all about – making contacts and developing new business opportunities,” explained Rowena Suthers. The 2008 show will get underway on March 4, and those wishing to attend can obtain more detailed information from our exhibitions page at tyrepress.com; the link to this page can be found under the infopool/events heading.
In less than 20 years Balkrishna Tyres (BKT) has developed a strong presence in the agricultural tyre segment and brought to market one of the widest ranges of agricultural (and other off highway) tyres currently available. It is only as recently as 1988 that the company’s first factory, in the West Indian district of Aurangabad, entered production with a modest annual production of 3,000 tonnes; today the company has an output in excess of 30 times that, and much of BKT’s annual production is destined for global markets, including our own.
According to information the company presented at November’s Agritechnika show in Hanover, Germany, exports now account for 95 per cent of BKT production. Of this amount, 70 per cent is exported to Europe (by comparison the next largest export market, North America, generates only 11 per cent of export sales), with 2006/07 sales in this region valued at approximately £58 million. Tyres for agricultural applications make up the bulk of European sales, BKT representatives added. In the UK and Northern Ireland the BKT range is exclusively marketed by RH Claydon Ltd.
On December 13 Apollo Tyres stated it would invest more than one billion rupees to increase its PCR tyre capacity from 300,000 to 450,000 units per year. According to company COO and joint managing director Neeraj Kanwar, this expansion programme would be centred on Apollo’s Limda factory in the state of Gujarat, with some further small capacity increases also carried out in its other facilities in India and South Africa.
“We have earmarked Rs 108-crore (£13.4 million) investment for the next fiscal to increase our production capacity to 4.5 lakh (450,000) tyres per annum. This will suffice the expansion plan given that this will be an expansion of existing capacity as opposed to creating greenfield site,” Kanwar was quoted by India’s Sify news as saying. “We will embark on capacity expansion in the next fiscal and it will be completed by the end of the fiscal.” Kanwar added that the company would use internal accruals to fund the proposed expansion.
Recently released quarterly results for India’s Ceat Ltd show robust growth in the quarter to 30 September 2007. While net sales increased by a respectable but unremarkable 8.5 per cent over the same three months of 2006, to Rs5.83 billion (£72.65 million), operating profit more than doubled during the period. For the quarter to 20 September 2007 Ceat achieved an operating profit of Rs 622.9 million (£7.76 million), up from Rs 307,3 million (£3.82 million) a year earlier. Pre-tax profit showed an even more impressive increase, rising to Rs405.6 million (£5.1 million), a 470.5 per cent increase on the September 2006 figure of Rs71.1 million (£885,600).
India’s Ceat Ltd is reportedly close to closing a deal that will see 2.8 hectares of surplus land at its Mumbai factory sold off. This sale will most likely take place some time before March 2008, according to managing director Paras K. Chowdhary. He added that the proceeds from the sale would be injected into the company’s plans to expand capacity.
“We are very close to finalising the sale. We had wanted to close it by September but it has been delayed.” he said. “A large part of the expansion will be met from the sale and internal accruals.”
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