Page 46 - RB-92-20-1

INDIA
Indag Rubber Transforming Brand from Production to the Market Place
India’s retread industry is in the midst of churning as the unorganised sector is shrinking to the advantage of the organised sector. GST implementation has taken away the undue price advantage due to tax evasion by unorganised setups. The ongoing liquidity shortage coupled with fiscal restructuring by the government is moving the economy from an
getting more organised and formalised, and we have to change with the times,” admitted Vijay Shrinivas, Chief Commercial Officer, Indag Rubber Limited. Shrinivas is on a mission to transform the brand image and make Indag “Future Ready” for the domestic and international market, heading a team with the best people in the trade.
the demand among its franchisee clientele spread all over the country. “We now have salespeople continuously motivating the franchisee network so that they put all their efforts in partnering with the fleet owners, to reduce their cost per km (CPKM),” Shrinivas said.
India’s retreading industr y was estimated to be in between 4,500 – 5,000 metric tons per month a couple of years ago. But the demonetisation of high currency notes followed by the swift move to the GST regime dropped industrial growth in the country, and eventually may have impacted the tread rubber production by 10-15%. Shrinivas believes; “Investment in infrastructure like the new high-speed road network will eventually unlock the market potential in the years to come.” The Indian commercial tyre industry is maturing fast towards radialisation with 3-4% growth year-on-year. At present radialisation has reached nearly 53% resulting in a fall in retreading volumes, as radial tyres come for retreading after 75,000 km whereas bias-ply tyres turn up for retreading after ever y 50,000 km.
Instead of viewing as drop in volumes due to radialisation, it should be viewed as improving the dynamics of retreading, increasing retread opportunities to 2-3 times per tyre with radial tyres.
On asking if Indag has any plans to foray into new business areas, Shrinivas reiterated, “The retreading sector has lot of growth potential and focus remains on the core business like manufacturing, tread rubber and related raw material.” Meanwhile, Indag is now actively pushing its brand beyond India as a new team has been appointed to market the range overseas, with a premium product range under the brand name “ZOMA”. We never explored the export markets earlier but now focus is balanced between the domestic and foreign markets.
Indag’s tread manufacturing site
is spread over 5 acres in Nalagarh in the Northern state of Himachal Pradesh and employs about 260 people. The nearest train station is at Kalka, about 45 km from the Nalagarh site.
The site has the capacity to produce 1,800 tons per month of precured tread rubber for all kinds of vehicle applications. Indag has the capacity to manufacture 200 kilolitres of solution and three varieties of about 350 metric tons of cushion gum each month.
The Indag facility also houses a Retread Training Plant to train retreaders and demonstrate the performance of its retreads to fleet owners.
In 2012, the company expanded the capacity at Nalagarh plant from 6,000 MT to 13,800 MT/annum. In order to be ahead of curve, the capacity was further expanded to 20,000 MT/annum.
A new finishing line for heavy buffing texture was also added in the last quarter. Indag has also invested in building robust R&D apparatus at the Nalagarh site and upgrading equipment at regular intervals. The R&D wing was refurbished and replaced with new equipment about two years ago. Recently, a lab curing press for testing compound physical properties has also been added.
IRL was incorporated in 1978 as a joint venture between India’s Khemka Group and Bandag incorporated, USA. In 2006, the JV terminated, and the Indian partner Khemka Group bought out the 38.3% equity held by Bandag. IRL went public and was listed on the Mumbai Stock Exchange in 1984.
Vijay Shrinivas, Chief Commercial Officer, Indag Rubber Limited
unorganised/informal regime to a more formal structure.
While the organised sector of the industry is gearing-up to meet the challenge, and looking at the evolving scenario with objectivity, the tread makers as well as equipment suppliers are experiencing a drop in demand in the market, which is momentar y in nature while the market adjusts to the new formal regime. The demand is considered likely to bounce back in a vast market like India, which is known as a reliable rubber and machiner y supplier locally as well as globally. Prominent tread rubber major Indag Rubber Limited (IRL) is also on a journey to reinvent its brand in the domestic and global marketplace. The objective is straightforward - ‘Changing with the times.’ This involves transforming the brand right from the production level to the marketplace, which eventually leads to maintaining the company’s leadership position.
“The market is consolidating,
Indag says it has identified several areas, which will transform the Indag brand and drive it towards a leadership position in the industry. “Our focus is on fleet owners, who are our customers, strengthening our organised retreader network and building human resources in the company by attracting the best of the talent,” he emphasised. “One of the major challenges is to bring back the trust of fleet- owners into retreading. There is a large section of unorganised retreaders not following the right retread process, using poor equipment, earning a bad name for the struggling industr y. We need to have a new approach to doing business at each level,” said Shrinivas.
“Fleet owners should realise that casings are designed for multiple retreading, provided they follow the right inflation and maintenance procedures and remove the tyre at TWI” he stressed.
Meanwhile the company is redrawing its strategies to spur
46 Retreading Business