The Hindu Business Line : MRF now a Rs 5,000-cr company

Chennai, Oct. 5 MRF Ltd is now a Rs 5,000-crore company. MRF’s turnover for its financial year 2006-07, which closed last month, was in excess of Rs 5,000 crore, compared with Rs 4,260 crore in the previous year, the Company Chairman, Mr K.M. Mammen, told newspersons here today.

MRF has not put out all the performance figures as the accounts are yet to be considered by the board. However, the company said today that its net profit for the year would work out to around 1.8 per cent of turnover, which works out to about Rs 90 crore.

Close to 20 per cent of the turnover came from OEMs, 10 per cent from exports, 2 per cent from defence and the rest from the replacement market. Mr Mammen said that the company had a 26 per cent share of the Rs 19,000-crore replacement market for tyres.

He said that tyre manufacturers were hit by high rubber prices (Rs 91 a kg now). Importing rubber is not an option because the 20 per cent duty makes it more expensive than domestic prices. However, the duty on imported tyres is only around 10 per cent—the Chinese have captured 10 per cent of the replacement market. Mr Mammen said that if this situation continued, tyre manufacturers would be forced to put up plants abroad.

Future plans

The company has lined up Rs 600-crore investment in a 500-acre greenfield plant near Tiruchy. The project will include a test track. Land under acquisition is on and the plant is expected to go on stream in 2009.

A Rs 150-crore plant for aircraft tyres for Defence is also under consideration. The company is also looking at acquisition opportunities abroad. It has sent a team to South East Asia. A joint venture in China is being considered again.