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INDIA
A Muthu of Hitech Tyres
Elgi Bengaluru Distributor
Hopes for Market Recovery
in Early 2020
Elgi Rubber Limited offers a wide range of products for the retreading industry and maintains distributors spread across the country. The company has a wide consumable and equipment range, which it markets through
envelopes, curing bags, black vulcanising cement, cushion and bonding gum, mould cure tread rubber, tyre repair patches etc. It also exports a small quality of other items, especially spares, which do not fit into the Elgi
Nagaraj H Rao, of Sapthagiri and Company
distributors appointed in the various states of India.
Bengaluru based Elgi authorised distributor Sapthagiri and Company has a 15-year long association with the Coimbatore based company. The distributor is responsible for marketing machinery and consumables in the Southern states of Karnataka and Tamil Nadu.
“We are supplying Elgi consumables to the State Transport Undertakings of Karnataka and Tamil Nadu, both state-owned transport companies with captive retreading plants,” said Nagaraj H Rao, of Sapthagiri and Company. The company also supplies to five dealers in both states.
The distributor supplies retreading machinery including autoclaves, buffers, builders etc. and consumables includes curing
profile.
Commenting on the prevailing challenging scenario in the market, he said, “The liquidity flow in the market dropped especially after the implementation of GST, and the situation has worsened further with the occurrence of natural calamities like flooding due to excessive rainfall in the low lying areas of Karnataka, which have taken a toll on our sales.” “Recently, we have introduced the Ultra-series of inside and outside envelopes that eliminate the usage of curing rims, curing bags, flaps etc. which saves 20-30% energy. The product has received a positive response from the market.”
On when the market is likely to recover, he said, “We hope that liquidity will improve in the next six months in time for the next fiscal.
import of used tyres; therefore, that plan has been dropped,” said A Mutthu of Hitech Tyres. Imported casings are considered to be cost-effective compared to buying casings locally.
Hitech also phased out its old machinery and replaced it with a new modern set-up including a monorail system from Glisen in 2017.
“We have almost tripled the plant capacity, but the market has not improved in the last few years,” he complained.
The company replaced its single 3- tyre autoclave from Rajmahal with two – eight and three tyre autoclaves from Glisen. The plant can now retread 1,500 tyres per month but operates at a third of its capacity at about 400 tyres.
“We are now under pressure to increase output as production remains low, but expenses are
increasing. As part of the process of improving sales, meetings are planned with various fleet owners, who could be our potential customers.”
On other ways the production could be increased Mutthu said; “We can increase the production any time by extending long term credit but that way a lot of money ends up being lost in the market. Therefore, we are looking at other ideas to improve output,” he stressed.
“We are also trying to improve our quality to get a better price in the market. We are looking at acquiring inner and outer envelopes from Elgi, which could improve the finishing of the tyre. We have to keep pace with the prevailing trends by introducing new things that bring us ahead of others,” he explained.
Hitech Focuses on Improving Quality Standards
India’s largest tyre solution company, Elgi Rubber Company Ltd has indicated that it plans to sell its consumables range in the open market within India from 2020 onwards. The Coimbatore headquartered company was the first to introduce a franchisee network in the Indian retread business. With the market dynamics drastically changing, the company thinks it’s time to transform its marketing strategy.
“We are entering the open market for consumables, offering products like bonding gum, envelopes, curing bags, black vulcanising cement, retreading and repair tools,” revealed Harsha Varadaraj of Elgi Rubber Company, who spoke during the Tyrexpo India show in Chennai.
On the potential of entering into the open market, Harsha emphasised, “We have a brand
name to back, and we have to be aggressive in the open market to widen our reach.” Currently, the consumables are sold through the company’s franchisee network. “The idea is now to expand our service among end-users, especially the fleet owners,” he added.
The company is also working out modalities to introduce its tyre care programme ‘Fleet Trac’ with the prominent Chennai-based retread franchisee General Tyres in order to expand the fleet management programme among its customers. Fleet Trac is a fleet monitoring system designed to provide optimum tyre performance and improve driver habits through GPS monitoring. The programme is also being extended to support retread franchisees in getting access to tyres owned by major fleets.
Interestingly, through the tyre performance tracking software,
Despite the challenging market scenario, independent retreaders in India are continuing to make efforts to improve their volumes. Retread output has been consistently on the reverse side over the last couple of years due to liquidity issues in the market considering the credit-oriented nature of the business, but independent retreaders are searching for newer ideas to
remain viable in the market as their business association with retreading passes through the generations.
One of the prominent Chennai based retreaders, for example, has been looking into importing old casings for its retread unit. “We were planning to import casings from Japan and South Korea, but recently the Indian government has been considering a ban on
36 Retreading Business
Elgi to Enter Open Market in India for Consumables Business