India
News that Apollo Tyres was considering some form of joint venture with Indian mining vehicle manufacturer Bharat Earth Movers Ltd (BEML) and its most significant customer, Coal India, was first disclosed in early April 2007. Eight months later India’s Economic Times reports that the tyremaker has entered into a tripartite agreement with these two companies for the supply of OTR tyres.
Managers from the MRF tyre plant at Tiruvottiyur in the Indian state of Tamil Nadu met with union representatives on December 7 in an attempt to resolve the deadlock over the factory lockout that began four days earlier. Plant management announced an indefinite lockout on December 3, the result of their claim of employee indiscipline and inability to meet productivity norms. A previous meeting on December 5 failed to resolve the issue.
Despite the increasing strength of the rupee tyre manufacturers in India are still enjoying export growth, reports the Hindu Business Line. According to figures presented in the Indian business daily, exports increased by 19.2 per cent in the current financial year, with approximately 3.1 million units exported during the period. During the same months of the previous fiscal year total exports were in the vicinity of 2.6 million units.
“Exports in 2006-07 had shown a decline, as the demand in the domestic industry was healthy,” said Apollo Tyres COO and joint managing director Neeraj Kanwar. “With serving the domestic industry being a priority, exports seem to have slowed down. But now the industry has added capacity to increase its competitiveness, which would make the export growth come back to earlier levels. We expect exports to remain buoyant.”
Comments made by Apollo Tyres joint managing director and COO during his attendance at the World Economic Forum’s India Economic Summit on December 3 reiterate the tyremaker’s goals for the coming years. “As stated, we are looking to touch the two billion dollar sales by 2010 and we are looking to enter strategic markets in Asia Pacific and Europe in the passengers tyre segment,” commented Kanwar to media covering the New Delhi summit. When asked whether the company, who in 2006 paid £35.4 million in cash for South Africa’s Dunlop International, intended to support its expansion through further acquisitions, Kanwar replied that “both organic and inorganic growth will play important part as we aim to achieve our 2010 target.”
Indag Rubber Ltd. (IRL) was formed almost three decades ago as a joint venture between Indian company Khemka and US retreading giant Bandag and the JV pioneered the introduction of precured retreading in India in the mid 1980s. Last year the collaboration with Bandag ended and IRL has branched out into the international market with a new brand of procured treads called “Zoma”.
The Zoma range comprises more than 20 different patterns, designed for different applications and axle types and all are manufactured, says Indag, from the highest specification raw materials, including premium rubber polymers and high structure carbon black, using the latest technology.
JK Tyres has become the latest Indian manufacturer to talk of boosting its outsourcing of production to Chinese manufacturers. An article printed in the Hindu Business Line reports that the company, who already has five or six Chinese partners producing tyres under the JK brand name, intends to increase its outsourcing activity there by around 10 per cent.
This measure is being taken in order to increase JK Tyre’s sales in Chinese and other overseas markets. “We are looking at strategic partners in South East Asia or China to serve the local market in those countries as well as overseas markets. Though the China business is miniscule currently, we are looking to expand it,” quoted the Hindu Business Line of JK Tyre vice chairman and managing director Raghupati Singhania.
The Marangoni Village the Italian tyre and retreading systems manufacturer constructed at last year’s Essen show was about more than just combining exhibition space. As far as the company’s management is concerned, this move symbolised the first step in a “redefinition of the Marangoni’s corporate strategy.” In other words, the company is re-doubling its efforts to focus on the synergies available to a group that runs as a “highly networked system” rather than a number of autonomous entities.
Looking at the how the company has expanding internationally over the years, retreading has always been a key part of the group’s business. In fact the company’s domestic Italian market is the only territory in the world where less than half of group sales (40 per cent – see chart for more details) come from retreading related operations. With Western Europe accounting for 34 per cent of total group turnover the half of this figure that is retreading related remains central to the company’s operation.
In addition to being a tyre manufacturer Apollo Tyres operates a number of health clinics in India – at present seven are in operation and further establishments are planned. Through this healthcare connection Apollo plans to commemorate World AIDS Day, December 1, 2007, at all its manufacturing locations and clinics through a week-long series of activities.
The All India Rubber Industries Association (Northern Region) and Confederation of Indian Industry (CII) have announced dates for the inaugural Rubber Tech 2008 – an International Exhibition & Conference on Rubber Technologies, Machineries & Products. The show will be held in New Delhi, India, between February 23 and 26, 2008.
The rubber Industry has been growing at over 10 per cent annually, and the two organisers believe there is an increasing need for technological advancement in order to achieve efficiency and compete globally. Technical advancement – in rubber products, related machinery and technical services – has therefore been made the principal focus of Rubber Tech 2008. The exhibition is intended to act as a platform for the showcasing of technological advancements that are taking place in the industry, and the organisers are confident Rubber Teach 2008 will establish a benchmark for India’s rubber industry. The show will facilitate joint venture, technology transfer, and marketing arrangements and will also provide opportunities to network with the global rubber industry’s who’s who.
Plans by India’s Ceat Ltd to build a factory for the production of 60 tonne OTR tyres should be finalised by the end of the year or shortly afterwards, and construction of the new facility, located near the city of Patalganga in western India, is anticipated to begin by next May. The newspaper Hindu Business Line also reports that ‘sources’ claim discussions between Ceat and possible partners are in an “advanced stage”, indicating that a second-tier tyre major is the most likely collaborator for such a project. The Hindu Business Line named Yokohama, Toyo, Cooper, Kumho and Hankook as likely providers of “decent radial technologies.”
India’s national house of representatives, the Lok Sabha, on November 23 passed the Tyre Corporation of India (Disinvestment of ownership) Bill, 2007 by voice vote. The move brings the divestment of the Indian government’s equity in the troubled entity another step closer. The Bill also seeks to revive the fortunes of the government controlled public sector corporation through pairing with a strategic private industry partner.
India’s minister for heavy industry and public sector enterprises, Mr Santosh Mohan Dev, said the government agreed upon four suggestions submitted by the ministry’s standing committee.
The Agritechnica exhibition, held in Hanover, Germany between November 13 and 17 provided a platform for European and international tyre manufacturers to display their latest products. In the home town of Continental Tyre the Conti brand name was prevalent at the show. These days, of course, all Continental brand tyres are produced under licence by the Czech Republic based company Mitas a.s., and Mitas promoted its premium Continental range extensively during the show, along with its Mitas brand and, to a lesser extent, Semperit. Products showcased included the Continental SuperVolumeTyre (SVT), a ‘D’ speed designation tyre that is approved for speeds up to 70 kilometres (43 miles) per hour. The tyre was designed for machines with an output of more than 180hp, and as the name suggests each tyre contains a very large volume of air – ensuring gentle ground handling with high load capacities and the lowest possible tyre pressure. The tyre’s large ground contact patch ensures a good level of traction.
Apollo Tyres’ plans to double its turnover to US$2 billion by 2010 involve expansion in Europe, and Neeraj Kanwar, the company’s joint managing director and COO, has revealed further details of Apollo’s intentions to this end. Comments made by the senior Apollo executive have been printed in the Indian business newspaper, Mint.
The tyremaker is aware of Europe’s value as a market, and is planning its entry into the market carefully. Neeraj Kanwar said that Apollo views Europe “eventually as a domestic market.” Therefore, the company’s involvement in the region is “taking time because we want to get the service infrastructure and the back-end (operations) ready.” A previous attempt at European distribution, in cooperation with Netherlands based wholesaler Euro-Tyre BV, saw only a limited quantity of Apollo Tyres products sold in Europe, and this working relationship has now ended.
Automechanika Shanghai – one of China’s leading professional forums for the automotive parts, components and aftermarket industry – will take place from December 5 to 7 at the Shanghai New International Expo Centre. With over 1,000 exhibitors in six exhibition halls, the 2007 event will be without question the largest Automechanika show ever held in China.
Exhibitors from 24 countries & regions will be in attendance, including those from Belgium, Brazil, China, Finland, Germany, Hong Kong, India, Indonesia, Italy, Japan, Korea, Latvia, Malaysia, Mexico, the Netherlands, Poland, Russia, Singapore, Spain, Taiwan, Thailand, Turkey, the UK and the USA. The fair will also feature the Automechanika Academy and the Match-Making Forum, as in previous years.
An analysis of India’s manufacturing sectors, reported in Indian daily The Financial Express, has revealed that the tyre sector, after electronics, was the best performer during the July to September 2007 period. The total net profit figure of the eight tyre companies under the spotlight grew by 139.9 per cent to Rs 1.175 billion (£14.56 million) during the three month period, as opposed to Rs 489.90 million (£6.07 million) during July to September 2006. Of these eight firms, CEAT showed a particularly significant growth in net profit, increasing by 565.8 per cent to RS 255 million (£3.16 million) from Rs 38.3 million (£474,600) a year earlier. The total sales of this group of tyremakers increase by 4.52 per cent during the same three-month period.
If you would like the latest news from the Chinese tyre industry in Chinese, visit our partner site TyrepressChina.com. Or click below to continue on Tyrepress.
