Story by:
Deven Lad
Announcing Vision 2020, which is about becoming a premier tyre company with a diversified and multi-national presence, Apollo Tyres has reported 18 per cent growth in FY2018-19 at Rs.17273 crores as against Rs.14674 crores in FY2017-18. Reporting a net profit of Rs.680 crores, the CV tyre major is pushing for integrated thinking as the key to stronger growth in the years to come. Enjoying a diversified and multi-country presence, the company has identified key priorities like the building of leadership in India(its home country), premium-isation in Europe and strategic exploration of attractive markets to realise Vision 2020. Integrating these priority areas to create value in the short, medium and long-term, Apollo Tyres is looking at an exciting current fiscal to further consolidate its position as a leading CV tyre manufacturer. Stating that FY2019-20 will not be an easy year, Neeraj Kanwar, Vice Chairman and Managing Director, Apollo Tyres, in his address to the shareholders, expressed that work is cut out to post above-average growth. “I am confident that we will continue to be unstoppable in our pursuit for Vision 2020,” he mentioned.
Introducing a range of fuel-efficient tyres for CVs in the later part of the FY2018-19, the company, in the Truck & Bus Radial (TBR) segment, has achieved a good increase in the market. With the R&D playing a key role in the creation of first-to-market products, the tyre maker conducted materiality assessment in FY2017-18 through a third-party study. It identified the material issues by mapping stakeholder concerns and business priorities. It established process parameters and identified relevant non-financial topics, which would lead to a gain in efficiency and agility. Involving the evaluation of important matters based on their magnitude and the likelihood of their occurrence, materiality assessment helped the company to chalk out a comprehensive strategy for growth. Carrying out a survey among key stakeholder groups representing investors, customers, senior management, employees, suppliers, NGOs institutions, associations, and sustainability professionals, Apollo Tyres got its CV Forza team to engage with CV fleet owners to provide them with regular knowledge updates, technical assistance, and training on care and maintenance of tyres.
Successful in increasing its CV Zone footfall by 18 per cent in the last fiscal, Apollo Tyres experienced a 22 per cent rise in CV Zone service experience by initiating the best alignment services to customers. Continuing to expand its CV Zone centers to cater to the need of truck operators, the CV tyre major profited from the 16 per cent growth recorded by the TBR tyre segment. With the tyre industry in India witnessing nearly 11 per cent growth with an earning of Rs.63000 crore approximately in FY2018-19, according to Automotive Tyre Manufacturers Association (ATMA), Apollo Tyres more than doubled its CV Zones to 44. Banking on vehicle fleet expansion, infrastructure push by the government, growing urbanisation and rising disposable income among others to boost tyre demand, the CV tyre major took into account the anti-dumping duty on Chinese tyres, which led to a drop in the import of such tyres. With the TBR tyres in India generating a major revenue accounting to 55 per cent of the total revenue and contributing around 50 per cent of the total volume, Apollo Tyres managed to smartly increase its reach in the CV space in the last fiscal by a plethora of measures.
Tackling concerns regarding raw material (natural rubber especially), the tyre maker managed to absorb the cost escalation in the wake of the intense competition and various other market dynamics. It did result in pressure on margins, but the CV tyre major smartly steered growth strategies to offset it. Achieving a good growth of 18 per cent in a challenging environment, the company expanded its 17.5-inch tyre portfolio with the launch of trailer tyres. An OE supplier to Tata Motors, Ashok Leyland, Eicher Motors and BharatBenz, Apollo Tyres lay much stress on network expansion. Expanding the Retread zones, the company, tackling challenges like the inverted duty structure on the import of natural rubber at 25 per cent compared to that of a finished tyre, which attracts a duty of 10 per cent, conducted over 100 activities with fleet owners under the banner of ‘Apollo Sakushal Sarathi’ programme. It strengthened its relationship with large-and medium-fleet operators in the process. In the LCV space, the tyre major piloted its innovative and first-of-its-kind school engagement programme called ‘Apollo Safe Scholars’.
Introducing TBR Tyre Service Experts as a pilot in Uttar Pradesh in the last fiscal to help CV customers make their journey smart and fruitful, the company successfully tackled challenges like the variation in oil prices, the weakening of Indian currency, and the supply situation of natural rubber. Setting eyes on the delivery of above industry average growth, Apollo Tyres is confident of its workforce giving their best. Supporting the launch of electric buses by introducing a range of fuel efficiency tyres, Apollo Tyres is confident of achieving its Vision 2020 based on strong measures like conservation of energy, utilisation of alternate sources of energy, energy usage reduction, technology absorption, product improvement, and cost reduction.
