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G.K. Nair

Mr O.S. Kanwar, Chairman, Apollo Tyres.

KOCHI, Jan. 20

APOLLO Tyres Ltd, in its bid to become a transnational company, is on the look-out for acquisitions in China, Indonesia, and Africa.

"Right now the discussions with a Chinese company are in the advanced stage" and a final decision is expected soon, Mr O.S. Kanwar, Chairman of the company, told Business Line on Sunday. At present, the company is sourcing tyres from China for export to various markets overseas. So far, such exports stood at Rs 50 crore.

He said that there would be a consolidation in the tyre industry in the country in 2004 as "it is going to be the survival of the fittest". Apollo had already held discussions with its technical collaborators, Continental Tyres of Germany, and they are expected to come out with their decision. He said that such a consolidation would leave only two or three companies in the field and "Apollo would be one among them".

He said the company was better placed in the industry with an estimated turnover of Rs 2,000 crore in the current fiscal and it was expected to cross Rs 2,500 crore next financial. There is a 12 per cent growth now in the demand for tyres in the country while there was 20 per cent growth for Apollo tyres for the first time. "We are confident of maintaining it at this level during the year," he said.

In the truck replacement market Apollo topped with 35-40 per cent share of the market. With a strong marketing network the company had succeeded in cornering a sizeable share of the truck tyre market, he said. The demand for tyres in the country is expected to go up in coming years especially when the Golden Quadrilateral projects (super express highways) were completed, he said. One of the major constraints faced by the tyre industry in the country is the high level of taxes that constituted 56 per cent of the cost.

Mr Kanwar, who was here to participate at the Global Investor Meet, said that his company was investing Rs 200 crore in the State for capacity expansion of its two units at Perambra in Thrissur district and Kalamassery in Ernakulam district. The company had concluded long-term agreements with the workers unions in both the factories recently and it was a clear manifestation of the change in the attitude of the workers.

"The workmen are realising now that they have to change otherwise they will not be able to survive," he said. And it is visible in the attitude in recent months, he said.

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