Apollo Tyres emerges No.1 player

Bid to double turnover to Rs. 10,000 crores in two years
The entire automotive and associate industries had a bumpy ride in 2008-09 on account mainly of the fast spreading recession and the attendant industrial slowdown. But, for the Delhi-based Apollo Tyres it was an year of milestones and achievements, with the company attaining the leadership position in the Indian tyre industry. In fact, the company emerged a clear market leader by virtue of its outstanding performance and recording the cumulative annual revenue of Rs. 4,984 crores during the year, taking into account Indian and South African operations. Among the various contributory factors for the company emergence as the market leader is its extra focus on product quality. In fact, Apollo’s net sales continues to grow in double digits despite the demand slowdown.

According to sources in the engineering division, the company is aiming to double the turnover within the next two years to touch the Rs. 10,000-crore mark. The company is also increasing its investment in the new plant coming up at Oragadam in Chennai for production of truck radial tyres, which is expected to commence operation by November next. This is Apollo’s fifth unit in India, the other four being the two units located in Kerala and one each at Baroda and Pune.

Apollo is now reckoned the 11th largest tyre company in the world and has become truly global with the acquistion of three plants in South Africa and one in the Netherlands.

Despite the trying times, the company recorded a net profit after tax of Rs. 1.3 billion (Rs. 139.1 crores), making it the only top Indian tyre manufacturer to have remained profitable throughout each quarter of 2008-09.

While the first six months of the year witnessed skyrocketing raw material prices, the next six months faced a severe demand slowdown across the board, in both domestic and export markets, along with currency volatility.

Many firsts

Apollo Tyres has the distinction of having a number of firsts to its credit. It was the first Indian tyre company to launch exclusive branded outlets -- Apollo Tyre World -- for truck tyres, segment the market on the basis of load and mileage requirements, introduce packaging for car and two-wheeler tyres and tubes, run a customer loyalty programme, introduce radial tyres for the farm category, obtain ISO Certification for all its operations, produce H, V and W-speed rated tubeless tyres, run HIV-AIDS awareness and prevention clinics for the trucking community, support the creation of an Emergency Medical Service in an Indian city, execute an overseas acquisition, and, finally, the first tyre company to reach a revenue of over $1 billion.

Rapid growth and expansion

An analysis of the origin and growth of the company makes an interesting reading. Apollo was registered as a company in 1976 and its first plant commissioned in Perambra in Cochin in 1977. While the second plant was commissioned at Limda in Baroda in 1991, the company acquired Premier Tyres at Kalamassery in Cochin in 1995. The year 2000 witnessed establishment of the exclusive radial capacity at the Limda plant. In 2003, expansion of passenger car radial capacity was to 6,600 tyres/day was completed.

India’s first H-speed rated tubeless passenger car radial tyres was started in 2004, while expansion of the passenger car range to include 4x4 and all-terrain tyres was effected. In 2006, the company acquired Dunlop Tyres International in South Africa and Zimbabwe, and launched DuraTread. This was immediately followed by the launch of India’s first range of ultra-high performance V and W-speed rated tyres.

The year 2007 was most significant for Apollo Tyres, for it was then that the company launched the Regal truck and bus radial tyres, as also the Apollo Tennis Initiative and Mission 2018.

CEAT draws aggressive growth plans

CEAT Ltd., the flagship company of the Rs. 14,500-crore RPG Group, has reported strong results for the quarter ended March 2009. The PBT improved by 70 per cent from Rs. 21.5 crores in the fourth quarter of last year to Rs. 36.5 crores in the same period this year. High operating efficiency and exemplary working capital management yielded high profitability.

Mr. Paras K. Chowdhary, Managing Director, CEAT Ltd., said: “The company’s focus on improving operational efficiencies is reflected in the results. While we will continue maintaining our export thrust, it is our constant endeavor to increase our volumes in the domestic market. The coming year is expected to be extremely challenging. Our focus will be on enhancing value and productivity and reducing costs to maximize our top and bottomline”.

CEAT is on a major restructuring drive to shed its extra flab and improve operational efficiency. The whole process of looking inward started in 2008 when the company celebrated its 50th year with the unveiling of a new brand identity. The new branding initiative will have its impact in the next two-three years.

In terms of business, it was quite a turbulent year, according to Mr. Arnab Banerjee, Vice President - Sales & Marketing, mainly due to the hyper inflation in commodity prices in the first half. But CEAT performed better than the industry in the third and fourth quarters mainly by cutting down costs, improvement in production efficiencies, better product mix, reduced outsourcing and product mix rationalisation.

All these measures resulted in savings of close to Rs. 8 to 9 crores per month through the second half. “We expect the momentum to continue during the current year as well, and this should result in further cut-down in cost by another Rs. 5 to 8 crores per month. We are targeting cost savings to the tune of Rs. 50 to 100 crores vis-a-vis the second half of last year”, says Mr. Banerjee.

CEAT’s new radial tyre manufacturing facility at Halol in Gujarat will manufacture both passenger car and truck and bus radial tyres. The initial capacity planned was three lakh passenger car tyres and 30,000 truck and bus radials.

“The radial project being set up at Halol is progressing as per schedule, and the company expects to start production in 18 months. We are slightly raising capacity at Halol. We intend to increase the truck and bus radial capacity to 40,000 from the planned 30,000 tyres initially. In fact, the recession has only helped as the capital cost has come down, and the lead time for long delivery items has also come down. We are setting up the plant faster and at a lower capex”, adds Mr. Banerjee.

On the technology for truck and bus radials, there was speculation that CEAT might tie-up with one of the global brands for the Indian market. However, Mr. Banerjee has confirmed that CEAT is now working with a US-based consultancy group which has large expertise in all aspects of tyre technology. “We are getting into the truck and bus radial manufacturing on our own, and we are confident that we will be able to deliver a great product”.

Currently, CEAT is importing truck and bus radials and sells close to 5,000 tyres per month. To understand the dynamics of the TBR segment and the customer requirement, the company has launched a wheel management centre at Sankagiri in Tamil Nadu, which is a major trucking centre.

CEAT has started with a training centre for educating customers on new developments in trucking and wheel management and train them on the various services like wheel alignment, greasing, TBR repair, nitrogen inflation, collection center for retreading of tyres and other regular services of tyres available there.

The company is planning to take this concept to all major trucking centers, and the target is to launch 20 such stores by 2010. The wheel management centre will be a one-stop shop for truckers for buying new tyres and retreading. All these initiatives will help the company when it launches its own range of truck radials.

CEAT is also working on its bias tyres. In the bias tyre segment, the flagship brands Lug XL and Mile Xl continue to do well and the company is planning to launch two new products during the current year. Almost 60-65 per cent of the company turnover comes from the truck segment and the balance from the passenger car and motorcycle segment. This is bound to change when the Halol plant starts commercial production.

CEAT currently enjoys a marketshare of 14 per cent in the truck and bus segment and the target is 24 per cent marketshare in five years time. The company has set an ambitious turnover target of Rs. 6,000 crores by 2013.

Trusted Brands Gold Award for CEAT

CEAT is the winner of the Reader’s Digest Trusted Brands Gold Award 2009 for Tyres category in India. The Reader’s Digest Trusted Brand Survey, which was launched in 1999, has been carried out annually for the past 10 years.

On the six parameters – quality, trustworthiness, credible image, value, innovative and understanding consumers – CEAT has been rated as the Most Trusted Brand by the well-educated readers of Digest.

CEAT has been the success story which consumers have recognized and expressed their trust by rewarding it as the Gold Winner of the Reader’s Digest Trusted Brand.

Speaking on the occasion, Mr. Vinod Kumar, Head-Marketing, CEAT Ltd., said: “We are pleased to receive the Reader’s Digest Trusted Brands Gold Award 2009 for Tyres category in India. This Award marks CEAT’s continuous endeavor to be the preferred tyre maker.

Brands that have a strong relationship of trust with consumers need to strengthen and reinforce it more than ever. The survey identifies which brands appeal most to Indian consumers.

Achieving Trusted Brand status is a genuine recognition of consumers’ approval. The survey reflects consumers’ choice of their most trusted and favorite brands among the thousands available in the market.

Apollo Tyres completes acquisition of Vredestein Banden BV

With all regulatory approvals in place and consent from the Judge of the Dutch Courts, Apollo Tyres Ltd. has concluded the formal process of acquiring a 100 per cent stake in the premium European tyre manufacturer Vredestein Banden BV (VBBV), based out of the Netherlands. The acquisition is being made from the parent company, Russia’s largest tyre manufacturer Amtel-Vredestein NV (AVNV), which was declared bankrupt on April 29.

An independent tyre company since 1946, VBBV became a part of AVNV in April 2005. AVNV’s bankruptcy has not affected the Netherlands-based VBBV, which continues to remain a viable entity with a ring-fenced financing arrangement and a turnover of approximately Euro 307 million for 2008.

Vredestein’s manufacturing unit is located at Enschede, an 1.5-hour drive from Amsterdam. Over 70 per cent of the 5.5 million tyres manufactured every year are high performance, high speed passenger car tyres with speed ratings of up to 300 kmph and sold primarily in the European Union. Vredestein enjoys high brand recognition in Europe for its performance tyres and also manufactures a second brand called Maloya.

The acquisition strengthens Apollo Tyres’ ongoing plans for the European market and provides Vredestein with opportunities to leverage its proximity to a larger industry player in terms of costs, people, products and access to markets beyond the European Union.

Vredestein has an established network of sales subsidiaries spanning key countries in the EU and the US. Over 30 per cent of VBBV’s products are sold in Germany, with the rest being sold across the EU and other parts of the world, including the US and the Middle East.

“This is a strategic alliance for us and will bolster Apollo’s plans for its European customers,” commented Onkar S. Kanwar, Chairman & Managing Director, Apollo Tyres Ltd. “The fit between the two companies spans the entire spectrum of R&D, products and people to manufacturing and markets. It is a synergistic match and our aim is to increase Vredestein’s global value in the coming years.”

Vredestein Banden BV currently employs around 1,500 people and is managed by a core group of senior managers, with vast experience in the tyre industry and a strong track record of profitability. The company has constantly notched a CAGR of 8.5 per cent in revenue over the last five years, a figure that is significantly higher than the industry growth rate in Europe.

“This alliance is a win-win combination for both companies,” adds Vredestein Banden BV’s Chief Executive Officer, Rob Oudshoorn. “We will bring to Apollo our edge in passenger car tyre technology alongside an understanding of the European market. At the same time, Apollo can offer us access to the non-European markets, valuable manufacturing expertise and assistance with lowering costs by leveraging the purchasing power of a larger entity. I have closely watched Apollo’s acquisition and integration with Dunlop South Africa, and the way they went about the merger speaks highly of the Apollo management’s outlook on people and implementing best practices.”

Oudshoorn is also positive on the next steps: “This partnership with Apollo will bring the desired level of stability to our operations and our people. We have gone through a period of uncertainty, and I am positive that we now have the right platform to truly harness the growth potential, of which Vredestein is capable in the future. We have the people, we have the technology, and now we have the right partner.”

Reinforcing Oudshoorn’s thoughts, Neeraj R. S. Kanwar, Vice Chairman & Joint Managing Director, Apollo Tyres Ltd., observed: “We will continue to run Vredestein Banden under the leadership of the current Vredestein management. As is our norm, the idea going forward is to ensure we leverage on each other’s strengths for combined benefits and better products and services for our customers.”

Neeraj Kanwar added that a comprehensive integration process would begin within a month. Areas of particular focus will be research and technology, products and brands, corporate purchase and finance. At the end of the process, which would involve managers from both companies, a consolidated plan for the short and medium term would be put into action.

The acquisition process began in November 2008 when a global bidding process was initiated by Amtel Vredestein NV. The process culminated with the signing off on all requirements, overseen and authenticated by the Supervisory Judge in the Almelo Court in the Netherlands.

Nomura, CMS Derks Star Busmann and KPMG acted as advisors to Apollo Tyres Ltd. for the transaction. J A D M Daniels of Daniels Huisman acted as trustee of AVNV.

Michelin truck service centre on Delhi-Jaipur highway opened

Michelin has opened the first of its kind Michelin truck service centre (MTSC) at Kotputli on the Delhi-Jaipur highway. The one-stop shop, equipped with state-of-the-art facilities, including computerized truck tyre alignment, balancing and repair machines, offers end-to-end tyre-related services for trucks.

The MTSC was inaugurated by Mr. Jean Paul Caylar, CEO, Michelin India, in the presence of Mr. Philippe Neyrat, Head Sales & Marketing, and Mr. Harkesh Jaggi, Manager Distribution, and other officials.

MTSC helps consumers reduce maintenance costs and optimize benefits from Michelin and other branded radial tyres. The opening of the MTSC facilitates easy availability of Michelin products and services along India’s highways and will help to meet the soaring demand for Michelin radial tyres.

On the occasion, Mr. Jean Paul Caylar said: “We see India as an economy developing at an accelerated pace, with focused growth in infrastructure. The highways across the country carry heavy traffic. Therefore, that is where the demand for a service centre was inevitable. As a beginning, we are opening MTSC at Kotputli, which will bring to the end users and fleet owners sophisticated services at competitive prices in minimum time”.

In keeping with its commitment to India, Michelin offers services mainly for radial tyres, which help contribute to save fuel, up to 10 per cent. Truck radials reduce the cost of the fleet owner by cutting his fuel bill and the overall tyre bill.

The extra benefits from the MTSC are reduced vehicle operation cost, a longer life for tyres through proper repair and alignment, as well as cut in turnaround time, ensuring higher productivity for fleet owners.

The MTSC is spread over an area of around 5,000 sq. ft. and has customer waiting area, showroom for display, etc., an exercise undertaken by Michelin for all its MTSC outlets. This is an internationally successful format, particularly in the Asia Pacific region.

Ceat’s first wheel management centre at Sankagiri

As part of its aggressive growth plans, Ceat Ltd. has launched its first Wheel Management Centre (WMC) at Sankagiri in Tamil Nadu for truck and bus radial tyres. Sankagiri has the potential of 7,000 new tyres per month of which 30 per cent are radial tyres.

With this launch, Ceat has further enhanced its reach to the masses in Tamil Nadu. The company is looking forward to launch 20 stores in India by 2010. The newly-opened centre will be a one-stop shop for truckers for buying new tyres and retreading.
Speaking at the inaugural function, Mr. Arnab Banerjee, Vice President - Sales & Marketing, Ceat Ltd., said: “Tamil Nadu is a very competitive market for radial tyres, and we are pleased to launch our first Wheel Management Centre for truck and bus radial tyres at Sankagiri. The launch of this facility will help Ceat to reach its masses and achieve its targets. Ceat has started with a training centre for educating customers on new developments in trucking and wheel management and train them in various services like wheel alignment, greasing, TBR repair, nitrogen inflation, collection center for retreading of tyres and other regular services of tyres available at WMC”.

The WMC is typically of an area of around 3,000-5,000 sq. ft. Each store would provide new Ceat tyres, wheel alignment, greasing, TBR repair, nitrogen inflation, collection center for retreading of tyres and other regular services of tyres.

JK Tyre setting up OTR plant in Mysore

JK Tyre & Industries Ltd., the industry leader and manufacturer of well-known brands like JK Tyre, Vikrant and Tornel, is penetrating into the Ultra-Large OTR tyre segment. The company has started producing the revolutionary OTR tyres which cost upto Rs.2 lakhs each and will be available in three sizes of 18.00-33, 21.00-35, 24.00-35.

This project is a result of an agreement between BEML and JK Tyre for supply of these Ultra-Large tyres to BEML for their modern vehicles and supply to Coal India Ltd. who is one of the largest consumers in the world for OTR tyres. The application of the tyres would be for the construction machines like earth movers, etc.

Dr. R.P. Singhania, Vice Chairman & Managing Director, JK Tyre & Industries Ltd., said: “We are already a major player in Off-The-Road (OTR) tyre segment and have presence across India in almost all applications like Mining, Rock Excavating, Quarrying, Dam Building and Port operations. Now we are expanding in the manufacturing of Ultra-Large OTR tyre in our new state-of-the-art manufacturing facility at Mysore. Our OTR tyre expansion plans will envisage an increase of almost 100% tons per day from existing operating capacity. Targeted completion of the OTR tyre expansion project is March 2010.

He added: “We have entered into a joint venture agrement with BEML Ltd. which is the largest OEM of OTR Tyres for producing large earth moving equipment for Coal India. We have delivered the first consignment of the tyres to BEML. The tyres delivered are 24.00-3548 PR tyre weighing almost 750 kgs and standing almost 7 feet tall. The largest tyre in the range for BEML will be 40.00-5758 PR weighing almost 3,700 kgs and standing almost 12 feet tall.”

JK Tyre is expanding despite the slowing domestic market. It is investing Rs. 120 crores into the OTR plant at Mysore which will be completed by March 2010. The company also has free access to countries forming part of North America Free Trade Agreement trade block, besides emerging economies of Latin America. The company plans to utilize these markets for exporting its OTR tyres out of India next year.

Design of these ultra-large tyres is based on extensive, application oriented, study and use of high-end design techniques, including performance prediction tools through use of FEA. The objective is to deliver bench mark performance in this category of products which are subjected to use in the most grueling condition in mines and other application areas. The technology development for these high-performance tyres is a result of dedicated cross functional teams involving the Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI) and other Development Wing and Service experts.

Apollo rolls out OTR tyres

XTRAX-branded off-the-road (OTR) tyres have started rolling out of Apollo’s Limda plant in Gujarat. A result of state-of-the-art technology, continuous production of OTRs began with an enormous 49-inch tyre (or over eight feet high), weighing as much as 1,100 kilograms or 1.1 ton. XTRAX tyres cater to vehicles in the mining and construction industry. This particular 49-incher would be fitted on to 90-tonner dumper trucks.

What leaves one amused about these huge tyres is the volume of raw material used per tyre more than 35 kgs of bead wire around 170 kgs of fabric and 850 kgs and more of rubber, apart from other material in similar quantities.

The time taken to produce a single 49-inch XTRAX, right from the mixing of compounds to the final product is around 24 hours. The last stage of production called curing, itself takes over eight hours. Special conveyor belts have been installed inside Apollo’s flagship Limda plant to facilitate the movement of these bulky products from one location to the other and a crane to load them on to trucks from the loading bay.

With tyres of this size, changes are inevitable!

Said Satish Sharma, Chief, India Operations, Apollo Tyres Ltd.: “Our OTR journey has been hastened since the acquisition of Dunlop South Africa and the OTR capabilities they have. The production of large OTR like the XTRAX 49-inch, has successfully filled a vital gap we had in our product portfolio. Producing higher size Off-The-Road tyres involve superior technology and skills.”

Currently, off-the-road tyres manufactured by Indian companies range from 24-inch to 49-inch, with the market size being valued at Rs. 7 billion a year.

According to the Automotive Tyre Manufacturers’ Association (ATMA), the average monthly production of OTR tyres in India is around 11,800 units. This has seen a 9% growth in the April-December (FY08-09) period, over the same period last year.

Continental AG foray into Indian tyre market

Continental AG, one of the top five global automotive suppliers and tyre manufacturers, has announced its entry into the Indian market with the launch of its premium tyres for passenger cars and utility vehicles in New Delhi.

This is Continental AG’s first direct tyre initiative in the Indian market as it recognizes the present and future potential of the country. As a global company, and with a current yearly production volume of more than 100 million tyres, it intends to develop a strong presence in the Indian aftermarket as well as seize possible opportunities with OE manufacturers.

Speaking on the occasion, Dr. Andreas Esser, Executive Vice President - Replacement Asia - Tyres, said: “The launch is a part of our overall growth strategy and commitment to the Asia Pacific region. We have two Passenger and Light Truck (PLT) tyre manufacturing locations in Asia (Malaysia) and worldwide presence in 22 sites in 14 countries. We have already been marketing our products in almost all the countries in the Asia Pacific region. Now Continental Tyres is starting in India. Continental has the No.1 position in the European tyre market and a leading market position in Malaysia, and we strive to develop a significant share here in India as well.”

Mr. Prashant Kumar, Director - Marketing and Sales Tyres for India, said: “India’s passenger car production has grown from 0.72 million in 2002-03 to 1.76 million in 2007-08 at a rate of 20% CAGR and, accordingly, tyre requirements in OEM and replacement markets have grown close to 17 million in the current year. Continuous economic development and global exposure have brought in significant demand for high quality tyres, resulting in a huge market in this segment. Continental is entering the aftermarket for this segment, with its world renowned premium tyres that offer superior performance along with state-of-the-art safety and comfort features.”

Continental in India is backed by the rich legacy of service of 50 years in the Indian automotive market. With its technical expertise, it is constantly growing with the Indian market. Continental evolved from being a technology provider and technical collaborator to some of the leading Indian tyre manufacturing companies to being a major player in the auto component sector by supplying auto electronic and mechatronic components to the automotive industry.

With targeted annual sales of Euro 25 billion for 2008, the Continental Corporation is one of the top automotive suppliers worldwide. As a supplier of brake systems, systems and components for the powertrain and chassis, instrumentation, infotainment solutions, vehicle electronics, tyres and technical elastomers, the Corporation contributes towards enhanced driving safety and protection of the global climate.

Continental is also a competent partner in networked automobile communication. Today, the corporation employs approximately 146,500 at nearly 200 locations in 36 countries.

Michelin bags first OEM order in India

Michelin India Tyres Private Ltd. has just started supplying tyres to Honda Motors India for its mid-sized sedan Honda Civic. Michelin is supplying its premium Energy MXV8 tyres for this car.

“This particular tyre is truly designed for comfort and chosen by the main Asian car makers for its silence & fuel savings. We see this as a first step in starting a relationship with Honda in India to compliment an already very close partnership we share with Honda worldwide”, said Mr. Jean Paul Caylar, the CEO of Michelin in India.

“Michelin Energy MXV8 complements this car and provides the best overall performance the customers expect from their vehicles, like driving pleasure, safety, low-noise level and low fuel consumption”, added Mr. Caylar.

Michelin Energy MXV8 belongs to the family of “Energy Tyres” developed using the Green “X” silica-based compound, replacing carbon black which is a petroleum derivative. This process reduces the rolling resistance of a tyre, thereby reducing fuel consumption, which in turn reduces the corresponding amount of carbon dioxide emitted by the vehicle.

Mr. T. Natsume, Director, Sales & Marketing, Honda Siel Cars India, said: “We are extremely pleased to have Michelin as one of the partners for the Honda Civic, which has set a new benchmark in technology, styling and fun to drive in the Indian automobile industry.”

With more than 115,000 employees and sales organizations in more than 170 countries, Michelin is one of the world’s largest tyre manufacturers. Dedicated to the improvement of sustainable mobility, Michelin designs, manufactures and sells tyres for every type of vehicle, including airplanes, automobiles, bicycles, earthmovers, farm equipment, heavy-duty trucks, motorcycles and the US space shuttle, on 69 production sites in 19 countries throughout five continents.

Research and innovation development is being taken care of in technology centres in Europe, the US and Japan.

Ceat unveils new logo

Two more production units planned

Amid its Golden Jubilee celebrations, Ceat Ltd. has unveiled a new logo that symbolizes the transformation sweeping across the company. This is the first-ever such change in the company’s history.

Unveiling it, Mr. Harsh V. Goenka, Chairman, RPG Group, said the new logo is designed to reflect today’s Ceat with a vision to meet the demands of tomorrow’s next generation market. Ceat is a customer-focused, employee-friendly socially responsible corporate. The company has been built on an enduring history of pioneering technology creating and supporting world class products and services. “Ceat’s new logo symbolizes not just our foundations but reveals an accent on the future.”

After recording the highest sales and exports in the last fiscal the company is all set to accelerate its growth with the commissioning of two new plants, increase in production, technology tie-up for innovative and world-class products and fresh investments to the tune of Rs. 1,000 crores. Investments will focus on R&D, market expansion and improving customer interface.
Mr. Paras K. Chowdhary, Ceat CEO, observed that the shift to a new logo and a new look symbolized the strategic transformation at Ceat. It also reflected the fact that, while Ceat has a long and proud heritage, the attributes that bring it to life for our customers are as fresh and new as ever. The overall design more accurately represents the company’s vision of leading the industry in delivering best-in-class products, innovation and services to consumers.

“We will set the benchmark in the tyre industry. This new logo makes a daring statement about the company’s strength and expertise in the automobile sector. It reflects the significant broadening of capabilities that has occurred in recent years as the company expanded and increased its product reach across segments and geographies both within the country and the globe,” said Mr. Arnab Banerjee, Vice President - Marketing.

Immediate future plans are highly investment-centric. The total outlay of Rs. 1,000 crores will be used to set up two brand new factories and conclude the radialisation programme. Focus will also be on ensuring higher export and strengthening Ceat’s position in the replacement market.

“With all these investments to occur during the course of this and the next couple of years, I expect Ceat to grow over the next five years by 20 per cent on an average year-on-year basis and by 2013 its consolidated turnover should be in the region of Rs. 6,000 crores,” he added.

The new-look logo is the result of extensive research with Ceat employees, customers and partners. It blends an all-caps contemporary typeface with a distinctive visual element. The upright hand-drawn type is bold and connotes strength and stability. The letter form is minimalist. It integrates the contemporary with the timeless. The E represents motion and movement.

The inspiration for the new logo comes from the idea of ‘raising the bar’. The lines in bright orange give it a youthful and contemporary look and combine well with the maturity and stability of the blue letter forms that signify Ceat’s rich heritage in the sector and its new initiatives.

The flagship company of RPG Enterprises, Ceat was established in 1958. Today it is one of India’s leading tyre manufacturers, with an annual turnover of over Rs. 2,500 crores. Its solid brand equity has empowered the company to establish a strong presence in both, domestic and international markets. Ceat tyres, tubes and flaps are renowned for their superior quality and durability.

Ceat offers the widest range of tyres for all user segments and manufactures world-class radials for all Indian vehicles, including, heavy-duty trucks and buses, light commercial vehicles, earthmovers, forklifts, tractors, trailers, cars, two-wheelers and auto-rickshaws.

It currently manufactures over 10 million tyres every year, enjoys a major market share in the light truck and truck tyre market, operates from plants in Mumbai and Nasik and exports to 110 countries across the US, Europe, Africa and other parts of Asia.
Ceat has a robust network consisting of 33 regional offices, over 3,500 dealers and more than 100 C&F agents.

JK Tyres acquires Mexican Tyre company

JK Tyre & Industries Ltd., announced the acquisition of a renowned Mexican Tyre company Tornel. The acquisition would be for 100% shareholding in the company and is being made through Special Purpose Vehicle (SPV) route. The transaction will involve an amount of approximately Rs. 2700 million and the buyout is expected to close by the end of May 2008, subject to applicable regulatory approvals. With this acquisition, JK Tyre & Industries Ltd. would substantially increase it's global foot print.


Tornel has three operating tyre plants with aggregate capacity of 6.6 million tyres per annum. Situated in Azcapotzalco, Tultitlan and Hidalgo, the 3 plants of Tornel employ 2000 people. The company is present in the entire range of Bias and Radial Tyres – from Truck, LCV, Farm and Industrial tyres in Bias category and Truck, LCV and High Speed Passenger Car tyres in Radial category.


Commenting on the acquisition, Mr. Hari Shankar Singhania, Chairman of JK Tyre & Industries Ltd., said, "JK Tyre has been outsourcing tyres for its export markets from China and Vietnam, besides its 4 manufacturing facilities in India. In line with our vision, this acquisition extends our global reach. The acquisition is also a strategic fit for JK Tyre as we are already the largest exporter to the North and South American markets".


Dr. R.P. Singhania, Vice Chairman & Managing Director, added during the conference, "We are glad that JK Tyre & Industries Ltd. continues to sustain its pace of growth and march confidently towards establishing itself as the No.1 tyre brand in India. JK Tyre already exports its tyres to 75 countries across 6 continents. Our export turnover last year was Rs. 500 crore. This acquisition will add substantial value to our existing tyre operations and strengthen our brand positioning. Expansion in the existing as well as our imminent forays into newer markets will drive our growth".


The turnover of Tornel is USD 202 million which together with JK Tyre's turnover of Rs. 30.2 billion i.e USD 800 million will make JK Tyre a leading tyre company of India, with combined turnover exceeding USD 1 billion. With this acquisition, the JK Tyre would be ranked 14th if not 13th globally.


Tornel's three plants together have a production capacity of 290 tons per day while JK Tyre at its four plants in India have a combined capacity of 650 tons per day. The combined capacity of two would thus be 940 tons per day making it India's largest four wheeler tyre company.


Tornel has a very wide distribution network of 241 distributors and 282 sales outlets. Strategic location of Mexico offers Tornel free access to the NAFTA trade block and emerging economies of Central and Southern America. Incidentally, JK Tyre has been exporting to these markets in a big way over the years. Therefore, together both the companies would considerably strengthen the market positioning in these territories. The takeover of Tornel will also enable JK Tyre to realign its domestic capacities.

Foundation laid for Apollo’s OTR tyre plant

The foundation for an exclusive off-the-road (OTR) tyre production facility was recently unveiled by Mr. Onkar S. Kanwar, Chairman and Managing Director, Apollo Tyres Ltd., at the company’s flagship manufacturing unit in Limda. This marks the beginning of Apollo Tyres’ entry into the OTR segment, with an initial capacity of 10 tonnes a day in the first phase of the project, to be scaled to 60 tonnes a day over the next three years.

Mr. Kanwar said on the occasion: “Buoyancy in the mining and construction industries globally has led to a demand-supply gap in OTR tyres, including in India. We will begin production with the conventional cross-ply tyres which are used in India. Over the next two-odd years, we will manufacture radial OTR tyres which are currently not produced in India. Various earthmover equipment manufacturers have shown eagerness to get into agreements with us that allow them exclusive access to our OTR production.”

The first set of tyres is expected to roll out in the next 15 months. The sizes produced here will begin from 25 inches (diameter) and go up to as much as 57 inches. The first phase will entail an investment of Rs. 1 billion, primarily for production of cross-ply OTR tyres. Additional investments will be made for radial production.
Radial OTR tyres are currently imported in India primarily in the size range of 50 inches and higher for vehicles used in the mining sector.

Apollo Tyres will also launch the Endurace premium radial tyres for heavy commercial vehicles later in the year to complement the company’s existing radial range in the category of Duramile for light commercial vehicles and the Regal Transport for medium heavy commercial vehicles.

Endurace is currently undergoing extensive road tests in India, South Africa and the UK to ensure product suitability for the export market. While it will cater to the newer generation of commercial vehicles in India, the use of tubeless radials in the country is still very low.

A predominantly cross-ply usage market, India is currently witnessing what is being called the “second radial revolution” – this time in commercial vehicles as opposed to the earlier passenger segment. On a small base, the replacement market in commercial radials is currently growing at 45-50 per cent every year. In the replacement market radial tyres constitute about nine per cent, compared to around two per cent in 2005. However, OE fitment of these tyres continues to be at a low of less than one per cent.

To cater to the special needs of commercial radial tyre users, Apollo Tyres has a trained team of consultants called Forza, who work with large transporters to ensure best usage, maintenance and to enable users to maximise the advantages of radial tyres.

However, a huge threat in this category is the cheaper Chinese imports into India which have made it difficult for Indian manufacturers to utilise their complete production or plan further capacity expansion. This is a crying need, given the growth rates and the requirement of Indian transporters and OEs in the coming years of quality tyres meant for the improved national highway infrastructure coming up across the country.

JK Tyres rolls out one millionth truck and bus radial tyre

JK Tyre & Industries Ltd. has achieved a major milestone by placing more than a million truck/bus radial tyres on the Indian roads. A pioneer in radial technology in India, it achieved a production level of a million tyres in 2005. Since then, the company has seen a spurt in domestic demand, which is growing at the rate of 60 per cent over the last three years.

JK Tyre took over Vikrant Tyres Ltd. in July 1997, upgraded all the truck/bus radial tyre building machinery and processes with an investment of around Rs. 250 crores. Commercial production with the collaboration of Continental AG started from July 1999 in a brand new air-conditioned plant.



Today the company is the market leader in the segment. This is despite the presence of global tyre manufacturers as well as all major Indian companies. It is currently the only firm in the country to have an exclusive plant for production of truck/bus radial tyres.



To meet the increased demand, JK has charted out ambitious expansion plans. It will expand capacity to around five lakh tyres by the middle of 2008 against the current 3.7 lakh tyres. Radialisation which was around two per cent during the last decade is taking off. The current radialisation is around six per cent, up from three per cent last year. It is expected to touch around 20 per cent in the next three years.


JK Tyre cuts prices


JK Tyre & Industries Ltd. has decided to pass on the entire Budget duty relief to consumers by reducing tyre prices. This is consequent to reduction in Cenvat duty on tyres/tubes/flaps in the Budget for 2008-09.


This reduction is applicable for the entire range of its products covering truck, LCV, car radial and bias as well as farm tyres.


To maintain the growth momentum of the economy and demand acceleration it is considered that any reduction in taxes deserves to be passed on to the consumers so that the true objective is fulfilled.