Apollo Tyres, the second-largest tyremaker in the country, which is focused on production of tyres for commercial vehicles in rural and urban markets is also eyeing industrial, construction and earthmoving segments to achieve its leadership goal in the domestic market by 2020-21. At bauma Conexpo 2018, Satish Sharma, President, Apmea (Asia Pacific, Middle East & Africa), Apollo Tyres spoke to Shrikant Rao about his company’s expansion plans and prospects in the emerging market.
From the perspective of this exhibition, tell us of Apollo Tyres’ emphasis on the construction and mining segments? What are the market opportunities you are eyeing?
For the construction and mining segments you have projects like Bharat Mala, Sagarmala and the Smart Cities. If we look at the quantum of work required to be done in these projects the demand for our products will definitely be very large. We are very specific in terms of our focus – we know who the potential customers are, have done a very well defined plan built around them on how to utilise the Apollo brand. We are looking at contractors, we have also done internal studies to map the entire requirements in the ports sector, which is an important material handling segment. As a company Apollo Tyres is focused on growth in the rural market especially for commercial vehicles and metros for car tyres. We want to position ourselves as a premium brand, and that is being reflected in our communication strategy.
In terms of your portfolio you are offering which are the segments you are targeting?
The idea is to target on all segments and we have been doing that over the last several years. At bauma Conexpo India 2018 we displayed all our major tyres. We are focused on three major segments – industrial, construction and earthmoving. But then going forward, we are also working towards entering the radial market, material handling is another segment that we would be very firmly be going into.
How has the company’s performance been this year and how has the market demand been?
The company’s performance has been extremely strong. In the first half we have grown by almost 26 per cent in India. In quarter 3 there has been a slight slowdown of the OEM growth and even in agriculture, let’s see how it pans out. The automotive sector is quite obviously the shining star of the country’s GDP growth, and we therefore see a growing demand for tyres. I am happy to say that our products across various categories are getting good traction.
Give us an understanding of your company’s investment and expansion plans?
Our investments are on our portfolio of products, the technologies that go into it, on customer service and on creating a brand. In Chennai, recently we have doubled our capacity of truck/bus radial (TBR) tyres. We are putting up a greenfield facility in Andhra Pradesh at an investment of about Rs 1,800 crore. The plant will come up by January 2020. To start with, it will have 3,000 of truck radial per day and 16,000 of passenger car tyres. While the de-bottlenecking and brownfield capacity expansion will help us meet the demand for now, the greenfield project once ready, will cater to the increased demand for the next five years. Overseas our plant in Hungary plant is expected to reach its planned capacity for phase-1 next year. We are also looking to expand our presence in markets like Thailand, Malaysia, UAE, Egypt and South Africa.
Give us an understanding of the philosophy which goes into the making of your products and what are you doing to extend their reach to customers?
We are trying to come up with a tyre which is lower in weight but which gives equal or better performance. That is our design strategy we are using in all the new products we are launching. Our effort is to understand the needs of our customers better. The theme within our company is: How can we provide winning products to our customers? Once that is there our job is that much easier. We have a robust process of product development and follow four design philosophies: we would like to come up with differentiator products – one which is lighter in weight, with better performance, aesthetically very appealing for all the products we have planned. We have made considerable investment in R&D. To enhance the capability of our tyres offer robust indoor and outdoor testing. We are trying to understand and cater to every market requirement. Apollo has more than 150 warehouses around the country which is the company’s muscle in terms of its supply chain and making a tyre available whenever it is required.
Tell us about Apollo Tyres’ experience of participating in bauma Conexpo and the benefits accrued?
As a strategy we have now used this exhibition regularly to create awareness in our B2B consumers. bauma Conexpo India is one of the gold standards as far as expos are concerned. A very quick walk tells you the trade show is very impressive; it gives you a sense of where the country is going. A lot of action is happening in infrastructure space and who’s who of the construction equipment industry is here. There is a buzz, an energy which you can definitely sense from everyone who is connected with building the country in terms of infrastructure. I am very excited about it. I think it is a good investment from our side to participate in the exhibition. We hope to learn and grow.
What is your outlook for the future?
We are definitely very positive of the way forward. Irrespective of the political dispensation of the day I think as a country we are headed for growth, nobody can stop it. In our long time horizon there will be ups and downs but we have to take in our stride. India is any case very resilient. From a company perspective we want to be a leader in this country with a very significant global presence. We want to do our portfolio and want to provide a dias for every application and want to dabble in all technologies. When the time comes we will also invest in radialization. The idea is that we are here for good. Our roadmap is very clear. Our initial reports wherever we have entered has been very positive. Of course many things have to be tweaked and improved. We are in
the process of doing all those things and I am quite confident of the company’s future.
Apollo’s European Presence
Apollo Tyres has reportedly started commercial production of its Apollo brand of truck tyres out of its Hungarian facility. The unit in the country’s Gyongyoshalasz region, is the company’s second production facility in Europe, and sixth worldwide. The production capacity is anticipated to reach planned capacity for Phase I by 2019. Apollo Tyres expects the plant to play a “strategic role” in the European market, as the factory will be responsible for supplying not just the passenger tire segment, but the truck/bus radial market as well. The company started supplying Apollo brand of truck tyres in Europe in 2017, and has since then, sold in different countries. It is reported the first lot of these truck tyres are now being used by Piessens and Zonen, a Londerzeel, Belgium based firm specialising in transportation of construction materials.