We have recently commissioned another project for manufacturing underground mining tyres
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We have recently commissioned another project for manufacturing underground mining tyres

Moving with the trend of manufacturing in India and Atmanirbhar Bharat, Apollo Tyres has successfully managed to inaugurate new facilities, establish new trade partners, and explore a new range of products even during the lockdown phase. The company aims to be the leader in the premium two-wheeler segment. In an exclusive video interview with CW, Satish Sharma, President & Director, APMEA, Apollo Tyres, discusses new segments in the Indian tyre industry, manufacturing and exports, moving out of the lockdown blues and much more.

Excerpts:

How has the company dealt with the lockdown?

Today, the world is connected digitally, so are companies and industries.

Moving with the trend of manufacturing in India and Atmanirbhar Bharat, Apollo Tyres has successfully managed to inaugurate new facilities, establish new trade partners, and explore a new range of products even during the lockdown phase. The company aims to be the leader in the premium two-wheeler segment. In an exclusive video interview with CW, Satish Sharma, President & Director, APMEA, Apollo Tyres, discusses new segments in the Indian tyre industry, manufacturing and exports, moving out of the lockdown blues and much more. Excerpts: How has the company dealt with the lockdown? Today, the world is connected digitally, so are companies and industries. We have sustained an absolute shock in the last week of March, when we were about to close the year. The last 10 days of a year’s end, whichadds a crucial amount to the turnover, was impacted after the curfew. Our priority is to finish work-in-progress (WIP) plants. Being in the continuous process industry, wehad many WIPs stalled. Closing these plants was not a viable option. We sought permissions from the Government to get facilities started. Though we qualified for essential services, there was a two-way dialogue to understand the definitions and processes at the collectorlevel. It was followed by establishing handholding support for customersand other stakeholders, business partners, traders and our own team, and setting up the whole infrastructure. Our quarterly results of Q1 were down by 40 per cent in revenue terms.However, June was a surprise. We were able to post a turnover in the replacement market higher than the last year; this continued in the month of July as well. The aftermarket is doing reasonably well and the response from OEMs in different shapes and colours is motivating. The agriculture segment is doing well too, specifically tractors. A better monsoon and the government package aimed at MSMEs and the rural sector have resulted in improved business activity in this segment. Apart from agriculture, the passenger vehicle (PV) segment haspicked up in July and should improve subsequently till the festival season. The commercial vehicle (CV) segment is still down. Please tell us about newly inaugurated facilities. The tyre industry has achieved a reasonable amount of capex in the past three to four years. Manufacturing was slowing down even in the preCOVID-19 period. Interestingly, the tyre industry has already invested in buildingcapacities. Three years ago, Apollo Tyres doubledits truck tyre capacity in Chennai, which was soon followed by Andhra Pradesh Phase 1, which aims at achieving 7,500 car tyres a day and some 1,100 truck tyres a day. The truck tyre capacity will be further extended to 3,000 tyres a day followed by15,000 car tyres a day.We were to inaugurate it when COVID-19 struck at the very last phase of our commitment. So, we delayed our plans for three months and have inaugurated it this month. Meanwhile, we inaugurated a steel radial motorcycle facility in Gujarat. We aim to achieve leadership in the premium two-wheeler segment in India. There is a shift towards performance motorcycles, away from the 100cc and 125cc categories, which are still going to be popular. We have the highest range of technology for this end of the market. How do you see the anti-dumping of Chinese goods bringing opportunities to India? Anti-dumping is an old story now. Anti-dumping duty came in two years ago on truck and bus radial tyres and had started benefitting the Indian tyre industry.Imports of radial tyres from China were reduced by 50 per cent after the duty was established. The Government has put two-wheeler, radial and truck tyres on a restricted list. Any such imports are governed by a license. This builds a fertile ground for India, especially when AtmanirbharBharat is in place. India is a verymature tyre industry with domestic companies such as Apollo, MRF, JK and CEAT, which are the big ones, and exporters like BKT and Alliance. Global multinational tyremakers, such as Michelin, Bridgestone, Continental and Yokohama, made their foray into India over the last decade. What is holding back the Government from coming out with the Scrappage Policy,which has been in the works for long now? I thinkthe scrappage policy is very much needed. As per my knowledge, the infrastructure is not yet ready.There are concerns about the number of vehicles that can opt for it. Considering it is a good policy, it has taken solong. It can move the needle of the industry and will invite a need for infrastructure to scrap the vehicles. I think that is the fundamental reason that the Government isstriving to establish the infrastructure. Please tell us about your global operations and business. About 80 per cent of the overall consolidated business revenue comes from outside India. Our bigger operations are here and India is our home market. Europe too is our home market – where we have two manufacturing facilities, in Netherland and Hungary. We export to almost the entire world except China and the US. But we are planning to get into the US. I supervise the APMEA region: Asia-Pacific, Middle East and Africa. We have four sale subsidiaries in this region that have come up in the past seven to eight years. We also have a base in Thailand, Malaysia, Dubai and South Africa. Recently, we have opened offices in Nepal and Bangladesh. Saudi Arabia is another additionthrough an exclusive distributor model. We have openedup retail in Nepal and it is exactly like India. Before that it was through distributors. Apollo Tyres has fared well with its presence in markets outsideIndia. We have a market share of 3-4 per cent in Europe. The APMEA region has been more responsive to varied portfolios in the past four to five years. So, we are looking for good growth in coming years. What about sectors in India you are targeting this year and beyond? As the whole focus of the Government is on infrastructure, requirement for all kinds of tyres will prevail. We have two-wheelers, PV and CV growing currently. Apollo has a presence in every pie of the market. We have already attained leadership in CV, PV, two-wheelers. We are aiming at higher end of the market as we are a late entrant and have a different strategy. As far asinfrastructure and mining are concerned, we have been building this business for the past five years. Today, Apollo has achieved a good thing as far as giant tyres are concerned—we first put up capacity for offtheroad (OTR) at about 13-14 tonne a day in Gujarat. We have recentlycommissioned another project for manufacturing underground mining tyres. In this segment, India has not reached the stage where mining has gone underground. We are catering to South Africa in a big way and one or two mines in India where underground mining is required. We have developed specialist tyres in the entire industrial range: for ports, graders and entire equipment and machines. Today, our distribution network in India is fairly robust and we are growing in excess of 50-60 per cent in this businesseach year. Today, we are a confident organisation as far as the off-highway tyre business is concerned. Our range is growing; our products are getting better. Tell us more about your CSR initiative with Ashok Leyland. Our CSR strategy is aligned to the business and these health clinic initiativeshave received multiple awards. Ashok Leyland has been partnering with us. There are 30-31 clinics today. Essentially, we kickstarted with HIV and STT because drivers are mobile carriers of these. They are stakeholders that directly impact our business. So, we opened the business and, overtime, these clinics have started looking at eye check-ups and general health issues, as well as tuberculosis.

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