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INDIA
Satish Sharma
Rajesh Ahuja of Adarsh Tyres and Treads
Interview: Satish Sharma – Apollo Tyres
Adarsh Coping with Competition from Low Cost Retread Shops
Satish Sharma is President, APMEA (Asia Pacific, Middle East & Africa) for Apollo Tyres Ltd. Our India based correspondent, Satnam Singh, recently had the opportunity to interview him about Apollo’s retreading operations.
SS: Yes, with the target of increasing our capacity by several hundred tonnes, we are looking at adding two new presses at our facility in the coming months.
RB: Apollo Tyres also forayed into tyre retreading, opening its first
retreading plant in Sonepat. What happened to the venture?
SS: That business is still operational for us, albeit currently only for niche markets. The Sonepat facility was relocated in its entirety to Chennai, so it would be incorrect to say that our operations there were closed.
RB: How many retread plants does Apollo own and are there any more plants in the pipeline?
SS: As mentioned above, we have only one facility currently, which is based at Chennai, in the southern part of the countr y. Currently, we don’t have any plans to open additional plants.
However, we do have several franchisees, branded as Apollo Retread Zone. We also sell our entire range of retreading materials on the open replacement market. As a dominant player in the commercial vehicle segment, especially in India, we are committed to providing a 360 degree solution to all our customers, which ver y much includes retreading as well as new tyres.
RB: What are your views on the prospects for the retreading business in India? In particular, how do you view the entr y of new tyre manufacturers into the retreading industry like Apollo, JK & MRF, or even the major international players like Michelin?
SS: The Retreading Industr y in India is definitely looking upwards, and is also getting more and more organised. The customers are opting for multiple retreads on their tyres, and prefer the same to be done by the tyre manufacturers, instead of the unorganised players. The entry of the major players will only benefit end-users, as they will get more value for money, in addition to the assurance of service and dependability.
Adarsh Group has been in the retreading business for the last three decades, having plants in Gurgaon city (in Har yana), neighbouring Delhi and in Gwalior in Madhya Pradesh. The retreading plant in Gwalior started 30 years back, while the Gurgaon unit started operations in 2009. The new plant at Gurgaon retreads around 400 tyres per month. “We are struggling somewhat right now but hope to improve in the near future, “ said Rajesh Ahuja of Adarsh Tyres and Treads. “We have pinned our hopes on the implementation of a unified tax structure with the enforcement of GST (Goods and Services Tax) by March 2015,” he added.
“We have been marginalised by the unorganised sector, who are not paying any taxes,” Ahuja complained. “With the high tax levied by the government, we have become expensive compared to low cost retread shops. However, with the new tax system in place, we hope to hike production levels from 400 to around 700 tyres per month,” he said.
The firm is operating its plant with Treadsdirect equipment and tread
the future prospects for retreading. “With increasing radialisation and global companies like Michelin entering the retreading sector in India, the overall quality and standards of retreading will improve in the years to come. We hope more people will go for retreading instead of preferring
new tyres due to the improvement in quality standards within the retreading industr y,” Ahuja stated. The three decade old Gwalior plant is also running at the half of the earlier level. “We used to retread more than 1,000 tyres per month at the Gwalior unit but increasing competition by low-end players has harmed our business and now production is down to about 500 tyres per month,” stated Ahuja. The Gwalior unit used to cater to a large regional market spreading over the districts of Morena, Etwah, Bhind and Gwalior in Madhya Pradesh. But over a period of time, retreading has become much cheaper in small retread units using basic equipment and the number of retreaders in the market has consolidated. Interestingly, Arash was the first retreader to start precure retreading
Retreading Business:
Mr Sharma, please give us a short history of Apollo's activities in the retreading sector and some data on Apollo’s tread making plant.
Satish Sharma: Apollo Tyres first forayed into the retreading business in 2006 and began by producing Apollo Duratread at our facility in Kalamassery, Kerala. At present we have a capacity of close to 300 tonnes per month. The increase in the usage of radial tyres in the truck and bus segment has increased the potential for retreading in India, and thereby also the need for additional tread manufacturing. With the higher demand, we are looking at inching- up our tread making capacity by 200 tonnes per month, starting early next year.
RB: Does Apollo supply tread rubber in the domestic market only or does the company also export?
SS: As of now, we are servicing the domestic market only. Having said that, we are working towards exporting to neighbouring countries in the near future.
RB: Is Apollo adding any new equipment at the tread making plant?
and is regarded as among the long standing franchisees of the Coimbatore based company in the Northern part of India. Adarsh has two 5 tyre chambers and consumes around 5 tonnes of tread per month at the Gurgaon unit. On the subject of the company’s plan to expand the Gurgaon plant, Ahuja said, “We have acquired the adjoining plot of land also and once the position on GST clears, we will expand the existing plant to the adjoining plot also.” Although production is slightly down at the moment at Adarsh Tyres, the company is upbeat about
by Elgi tread in the region three decades ago.
With the increase in competition, the Gwalior operation has diversified into the distributorship of Elgi equipment like compressors. “We strengthened our relationship by starting the promotion of Elgi’s service equipment around seven years back in Madhya Pradesh,” explained Ahuja.
42 Retreading Business