JK Tyre & Industries Ltd. (JK Tyre) reported quarterly operating profits (EBITDA) of 1.369 billion rupees (£17.769 million; 19.670 million euros; US$29.1 million) from sales of 9.38 billion rupees, publishing the details on 30 October. First half (April to September 2009) results show the company achieved post tax profits of 1 billion rupees against net sales of 18 billion rupees.
JK Tyre & Industries Ltd., maker of JK Tyre, Vikrant and Tornel, today (30 October) inaugurated what is reputed to be the country’s first radial truck and bus tyre manufacturing plant. The project doubles the radial tyre capacity at JK’s Mysore site from 400,000 to 800,000 a year, at a cost of 3.15 billion rupees (£40.445 million; 45 million euros; US$67 million). A further expansion of OTR capacity in Mysore, involving an investment of 1.2 billion rupees (£15.395 million; 17.178 million euros; US$25.484 million) is scheduled for completion in early 2010.
JK Tyre has completed the expansion of its facility in Mysore, India, more than doubling radial capacity to eight hundred thousand units per annum. Yet the nation’s growing acceptance of radial technology means additional capacity is still welcome: Company marketing director A.S. Mehta reports around Rs 2 billion (£26 million) will be invested in further expansion during the next 18 months in order to boost capacity by a further two hundred thousand pieces.
Production at JK Tyres’ plant in Kankroli, Rajasthan, were disrupted this past weekend by a sit-in strike by a group of plant workers.
There was no word on the size of the strike or the impact it had on actual tyre production. Efforts were being made to quell the strike, reports said. (Tire Review)
India’s Economic Times reports that New Delhi-based JK Tyre could be on the verge of making a deal to install a radial car tyre plant in Tamil Nadu, having met with regional government representatives.
During the first quarter of the current financial year JK Tyre & Industries Ltd. recorded “an excellent performance,” the company’s vice-chairman and managing director, Dr. Raghupati Singhania, noted. According to Dr. Singhania, this positive performance took the form of “all round cost reduction measures, better operating efficiencies, productivity and richer product mix.”
During the three months from April to June, the company achieved nets sales of Rs 8.98 billion (£112.4 million) and operating profit of Rs 1.07 billion (£13.4 million). The unaudited results show pre-tax profit to be Rs 620 million (£7.76 million).
JK Tyre are to sponsor the fifth JK Tyre Indian National Rotax Max Karting Championship, which begins with its first round of the season at Coimbatore. The championship will take off at the Kari Motor Speedway with the qualifying & heat races to be held on Saturday June 6 and the main races on Sunday June 7, 2009. The winners of the 3 classes will have the honour of being declared the National Rotax Karting Champions of India.
The concept of the championship has been formatted to develop the burgeoning field of Indian motor sports. For the first time several teams will be in the fray for the prestigious event, with Amaron-Meco Pro Kart, Red Rooster, Mohites, Indus, AW, Rayo and Meco-City Kart all taking part. Also, for the first time the entries will have an international flavour, with a Scottish driver and an Iraqi girl participating.
JK Tyre has topped the J.D. Power Asia Pacific 2009 India Original Equipment Tire Customer Satisfaction Index. Now in its ninth year, the study analyzes new-vehicle buyer satisfaction with original equipment tyres by examining five key factors – durability, ride, traction and handling. With an overall score of 811 on a 1,000-point scale, JK Tyre performed particularly well in all factors that drive overall satisfaction. MRF came second with 804, followed by Bridgestone (797), Apollo (784) and Goodyear (767). Overall satisfaction has declined by 10 points from 2008 to an average of 798 in 2009. Furthermore, the percentage of customers reporting a problem with their original tyres increased from 19 per cent in 2008 to 22 per cent in 2009.
“The occurrence of even a single problem leads to a strong negative impact on tyre satisfaction, with satisfaction averaging 70 points lower among customers who experience a tyre-related problem, compared with customers who do not,” said Mohit Arora, senior director at J.D. Power Asia Pacific, Singapore. “Problems like excessive tyre noise while driving, poor traction on wet roads and recurring flat tyres not only cause driving inconvenience, but also can be safety hazards, which intensifies the negative impact on customer satisfaction.”
JK Tyre has reported net sales of Rs 8.51 billion (£115.0 million) for the three-month period ending March 31, 2009. This figure represents a 254 per cent increase over the Rs 8.30 billion (£112.1 million) recorded in the corresponding period last year. Operating income in the first quarter of 2009 was Rs 8.54 billion (£115.4 million), an increase of 2.45 per cent. Net profit, at Rs 1.36 billion (£18.4 million), decreased 40.7 per cent year-on-year.
JK Tyres continues moving closer towards establishing an OTR tyre facility through which it will supply earthmoving equipment manufacturer Bharat Earth Movers Ltd (BEML). It is more than two years since the tyremaker was first named as a potential supplier for BEML, yet in late April JK Tyres reaffirmed its intention remains to establish a factory in the south-western city of Mysore for this purpose.
According to reports published by Indian news sources, the company will invest a total of Rs 2.7 billion (£36.8 million) in the project, 1.2 billion (£16.3 million) in an initial phase scheduled to be completed in March 2010. This stage one operation will provide a capacity of 4,000 OTR tyres a year; output will primarily benefit BEML, who has contributed Rs 1 billion in loans towards the project.
JK Tyre today announced the launch of its new Ultima NXT tubeless tyre range. With sizes suitable for the Maruti 800, Maruti Wagon R, Maruti Zen, Zen Estio, Alto and Hyundai Santro, the new range represents an attempt by the Indian manufacturer to grab a larger slice of the domestic small car pie.
“With the launch of Ultima NXT, we demonstrate our leadership in advance technology in tyres. The unique features of the Ultima NXT range of tyres include high control, smooth and silent drive. This captures all the benefits of the product and the experience we would like to give to the customer,” states company marketing director A S Mehta.
The tyres boast hydroplaning channels for increased wet handling and anti-aquaplaning. They are also equipped with the company’s new “Unique Split Wing” design which aims to provide better dry and wet traction.
A number of Indian manufacturers have lowered domestic market prices following a lowering of the excise duty charged upon tyres. The Indian government announced on February 24 it would reduce the excise on a range of consumer products from ten per cent to eight per cent in order to stimulate demand and boost the economy.
Apollo Tyres is passing on the benefit of the lower excise duty as of February 25, 2009 on all its replacement market commercial radial and cross ply tyres. “We should all support this proactive move by the government, which will boost the manufacturing as well as other sectors,” said Onkar S Kanwar, Apollo Tyres Ltd chairman and managing director. “We, on our part, will be passing on this reduction to our customers.”
Despite increased sales in 2008, JK Tyre’s fourth quarter results reveal a net loss for the quarter and reduced profits through the entire financial year. The company reports net sales of Rs 40,524.8 million (£591.4 million) during the 12 months to December 31, 2008, up 43.9 per cent on the 2007 yearly result. During the fourth quarter net sales were Rs 7,798.2 million (£113.8 million), a more muted 6.9 per cent increase on the fourth quarter of the previous year.
JK Tyre is the latest of the large Indian manufacturers to announce a large cut in the price of its tyres, reducing them by 400 rupees. In Mumbai, The Hindu reports that company president, Arun K Bajoria stated, “JK Tyres has reduced the price of truck tyres by 400 rupees in view of lowering of rubber prices.” The cut is the second in two months, following the Cenvat-related reductions in December (see Tyrepress.com for details).
These reductions come in a marked contrast to the last two years’ consistent and sharp upwards trajectory in India’s tyre prices, which totalled a 40-45 per cent increase. The increases were tracking the rising cost of natural rubber, though – much to the chagrin of the All India Motor Transport Congress – when rubber dropped in value, commercial tyre prices remained high. The AIMTC recently spent eight days conducting a nationwide strike due in part to the continued high prices of tyres.
Following news that Apollo has cut prices across the board in line with the four per cent reduction in India’s Central VAT rate, Ceat and JK Tyre have announced similar cuts of 3.6 and 3 per cent respectively on the average price of their products.
Apollo’s chairman, Onkar Kanwar wrote in a statement, following yesterday’s announcement on India’s cenvat, “We will be passing on this reduction to our customers, strengthening the measures that are being taken at a federal level.
“We do hope this, and other measures together, will boost production and consumer spending,” he concluded. JK’s director, AS Mehta voiced similar hopes: “Once the end user is benefited, it should benefit the entire industry.”
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