SPECIAL REPORT ON INDIAN TYRE INDUSTRY: An Un-Tyre-ing Journey

FOR BKT, THE WORLD IS ITS MARKET

‘Make in India’ for the global marketplace cannot be better demonstrated than Balkrishna Industries (BKT), a company with over 25 years of global presence in the ‘Off-Highway Tyres’ segment. In the early 1990s when every other tyre company in India was busy producing tyres primarily for mass use, the leaders at BKT foresaw a unique opportunity in international business and started production in the 'Off the Highway' segment.

Today, BKT enjoys principal presence in five continents around the world covering more than 130 countries. It is the preferred supplier to International OEM’s in industrial, construction and agricultural tyre segments. Since its inception in 1988, BKT has grown into a diversified industrial major exporting its expansive range of ‘Off-Highway Solutions’ to the world.

Quality conscious users which adhere to stringent conformity standards in countries like Europe and America prefer BKT as their supplier. The international quality of BKT tyres is achieved by using the foremost quality of raw materials that are processed through the most advanced and developed technology.

“Each product passes over 450 stages of tests. The result of this rigorous practice being that BKT Products are known for their reliability and have the lowest claim ratio in the industry,” informs Rajiv Poddar, Joint Managing Director, BKT.

Currently BKT has four functioning state of the art manufacturing plants spread across India, the recent one being set up in Bhuj, Gujarat. The company provides over 2300 different SKUs (Stock Keeping Units) for various kinds of applications.

The company has products from 5” rim diameter to 54” rim diameter for vehicles ranging from Trailers, Forklifts, Agriculture Machinery, Forestry etc. to technologically advanced machines like High Horsepower Tractors, Combines, Harvesters, GPS controlled vehicles, Articulated Dump Trucks, High-Speed cranes, Sophisticated Port Vehicles & Container Handlers etc.

BKT is also the first tyre company in India to produce the All Steel Radial OTR tyres which are produced at their Chopanki Plant in State of Rajasthan & Bhuj Plant in State of Gujarat. OTR vehicles ranging from Rigid Dump Trucks to Snow manoeuvring vehicles use these tyres. The company has its own R&D centre which develops these tyres that can encounter the toughest and the most hostile terrains faced during mining and industrial activities.

The tyres under this segment range from a 20” diameter Tipper Truck size to a giant 51” Rigid Dump Truck Size in Bias make and 49” in Radial make, thus covering every requirement for Industrial use and Mining.

BKT has been selling tyres to world's leading OEMs. The company recently launched an ultra advanced range of tyres especially for High Speed Cranes. The tyre 445/95 R25 enables heavy high speed cranes to journey at speeds of 80 km/hr.

For the agricultural sector, the company makes a range of tractor tyres that are specially designed to carry higher loads on and off roads with minimal soil compaction in field. These are available both in Bias & Radial Make.

“We invest heavily every year into R&D, to upgrade our plant facilities and develop new products”, informs Arvind Poddar, Chairman and Managing Director, BKT. “Our competition is with global tyre giants, so we always have to have an edge over technology if we have to compete with them. If you look at all steel OTR radial tyres for mining, we are the pioneers from India”, he further states.

 BRIDGESTONE INDIA PVT. LTD

BridgeStone is a Japanese tyre manufacturing company and it is the world’s largest tyre manufacturing company. Bridgestone India Pvt. Ltd started its operations in 1996. In March 1998 with the setup of its manufacturing facility in Kheda, Madhya Pradesh it started producing Bridgestone tyres for passenger cars and commercial vehicles in the country. It expanded its facilities by setting up one more facility in Chakan, Pune recently. It has now become one of the leading tyre companies in both the OEM & Replacement market.

Bridgestone Corporation, headquartered in Tokyo, is the world’s largest tyre and rubber company. In addition to tyres for use in a wide variety of applications, it also manufactures a broad range of diversified products, which include industrial rubber and chemical products and sporting goods. Its products are sold in over 150 nations and territories around the world.

On the one hand while Bridgestone India is increasing its retail presence in the country, it is also, on the other hand, coming up with concept stores that would focus on safety and eco-friendliness, These stores will showcase Bridgestone’s complete product range as well as provide services like tyre balancing, tyre alignment, battery check up, etc.

CEAT TYRES LIMITED

With net sales Rs 5754.77 crore, Ceat Tyres, controlled by Harsh Vardhan Goenka (He is Chairman, Non-Executive Director, Ceat Limited) is the flagship Company of the Rs 20,000 crore RPG Group and is a leading manufacturer of automobile tyres in the country.  The company has embarked on an expansion of its capacities which is expected to be completed during this current fiscal. “Our emphasis has been on building tyres which are not just world-class but also the safest on the road and the most environment-friendly.  We are also working on leveraging the benefits of digital technology particularly in manufacturing supply chain and other key business processes. The volatility in commodity prices especially rubber remains a challenge,” said Harsh Vardhan Goenka in his Annual Report of the company.

The company has a combined manufacturing capacity of 800 MT/day at its plants in Halol, Nashik, Bhandup and other outsourced capacities. Ceat is one of India’s leading tyre exporters, exporting its tyres to more than 100 countries. It has also established liaison offices in Indonesia   and   the   Middle East.  Last fiscal a CEAT Shoppe was set up in UAE to cater to the Company’s expanding market  in  the  Gulf region.

The company is a major exporter of tyres for trucks, off-the-road (OTR) vehicles and Light Commercial Vehicle categories. Specially designed tyres for export markets include tyres with good mileage, ride comfort and low noise for the Dubai taxi market, as well as the low noise tyres that surpass the stringent requirements under European regulations. Back home, the company is a major supplier to OEMs in the passenger vehicles, two-wheeler and commercial vehicles segments. The company, according to its Annual Report, got  approval from  many leading OEMs in passenger and  commercial  category   including Maruti (Swift), Honda (Activa 3G), Daimler Benz   (Bharat Benz),  Hero Motocorp (I-smart) and Bajaj (Discover 150). The    company   sees    in   its    OEM relationships a gateway to replacement demand.

CONTINENTAL INDIA LTD

Continental India Limited was founded on July 15, 2011 when Modi Tyres Company Private Limited was acquired by Continental AG. Continental AG is a leading automotive company, headquartered in Hannover, Germany. The Modipuram plant in Meerut district of Uttar Pradesh in India manufactures tyres for buses and trucks while tubes are manufactured at Partapur plant which is located at a distance of about 20 kms from Modipuram plant.

Employing 1500 people, Continental India Limited manufactures bias and radial tyres for buses/trucks and radial tyres for passenger cars.

Modi Rubber Limited was incorporated in 1971 and started commercial production in 1974. It was the first Indian tyre company in technical collaboration with Continental AG. In 2001 the company was closed and in 2009 Modi Tyres Company Private Limited restarted production in June. Continental AG acquired Modi Tyres Company Private Limited in 2011 and in July of the year, Continental India Limited was formed.

It built the first radial PLT green tyre at Modipuram on December 14, 2015 and cured on December 31. Again in 2013 the first TBR green tyre was built on February 1 at Modipuram and cured on February 19.

In 2014 Continental started production and commercial distribution of radial tyres for commercial vehicles (TBR) as well as premium passenger car tyres (PLT) in India. Continental has established a new state-of-the-art manufacturing facility for TBR & PLT tyres at its existing tyre plant at Modipuram with an initial capacity of 800,000 tyres p.a. for PLT and 220,000 tyres p.a. for TBR with further expansion potential, according to a company note.

DUNLOP TYRES

The journey of an extremely old tyre company in India has not been good at all. Pneumatic Tyre was discovered in the year 1888 by a Scotsman John Boyd Dunlop (1840-1921). The beginning of Dunlop legacy occurred in 1888. The first company founded by John Boyd Dunlop was Dunlop Tyres. In 1896 Dunlop started marketing cycle tyres in India. Several decades later in 1926 Dunlop incorporated its business in India as Dunlop Rubber Company (India) Limited with an authorised capital of Rs. 50 lakh. In 1928 Dunlop Rubber Co (I) Ltd was renamed Dunlop India Ltd (DIL). In 2005 the Ruia Group led by Pawan Kumar Ruia took control of DIL. At this point DIL had liabilities in excess of Rs 650 crore. In 2006  the DIL plant at Ambattur resumed production, while Sahaganj opened its gates a little later. Subsequently, the company stopped operations.

Early this year, BJP Rajya Sabha MP Chandan Mitra at a press conference in Kolkata said that Dunlop India is not a fit case for takeover anymore. He had made a visit to the Dunlop India factory at Sahaganj in Hooghly district. All efforts to revive Dunlop have failed till now.

FALCON TYRES LTD

A company with a measly turnover of Rs 64.43 crore for the nine months ended December 31, 2014, Falcon Tyres has fallen into bad days. It was incorporated in 1973 and made tyres for two-wheelers and cars. In February 2015, Falcon Tyres Ltd informed the Bombay Stock exchange of the resignation of Pawan Kumar Ruia (of Dunlop) as Chairman and Whole-time Director of the company. The Ruia group had got a controlling stake in Falcon Tyres in December 2005 through an offshore deal.

Products of Falcon Tyres were marketed under the Dunlop brand in the Indian market. The company has a plant at Mysore. The company had entered into a Technical Aid Agreement with Sumitomo Rubber Industries Ltd. of Japan which provided the company access to the latest International technology, new product range, upgraded product quality and the best processes. Ensuring established global standards in quality, the production capacity of the Mysore plant was gradually augmented from 350,000 tyres a month to more than 1,000,000 tyres a month.. A 6 MW co-generation power plant was also been commissioned.

A newspaper reported very recently that ICICI Bank had put Tulip Telecom & Falcon Tyres loans on the block, to which the company on July 30, 2015 replied to stock exchange, “We are not aware of any such development that ICICI Bank is putting Falcon loans on the block till it came out in the news paper....We re-iterate that there was no such discussion between ICICI bank and Falcon Management of such movement.”. It further stated that the “news published in said news paper does not have impact on operation/performance of the company too."

As on the end of September 2014, the Ruia group had a 31.62 per cent stake in Falcon, which has considerable presence in the two-wheeler tyre segment. The Ruia group now holds just 2.12 per cent in Falcon. It is believed that the ICICI Bank is now the de facto owner, according to unconfirmed sources.

GOODYEAR INDIA

Goodyear’s (an American company) presence in India is more than 92 years old, with two tyre plants/companies, one each in Ballabgarh and Aurangabad. In the passenger car segment, Goodyear in India supplies tyres to many of the leading Original Equipment Manufacturers. Goodyear in India has been a pioneer in introducing tubeless radial tyres in this segment. In the farm segment, in India, Goodyear tyres are supplied to all the major tractor companies.

A couple of months back the company had launched Assurance TripleMax, the first tyre to boast of Goodyear’s latest Hydrogrip technology which reduces braking distances by more than two metres on wet roads.

“Setting a new standard in tyre innovation, the Assurance TripleMax uses Hydrogrip technology, a Goodyear proprietary technology that allows drivers to reduce braking distances by more than 2 meters on wet roads compared to other tyres in the market today¹,” said P.K. Walia, VP Consumer Business, Goodyear India.

GOVIND RUBBER LTD

Govind Rubber Limited (GRL) is a global name for a range of world-class bicycle tyres and two wheelers tyres. This Rs 339 crore company was founded by late M. P. Poddar in 1964. GRL is part of the Poddar group. The V.M Poddar Group has the following business segments its fold: Govind Rubber Limited, GRL Tires Private Limited and GRL BV, The Netherlands. In order to expand the business of tyres and tubes across the European territory VM Poddar Group set up a wholly owned subsidiary to Govind Rubber Limited in Netherlands. GRL International Limited is the marketing arm of Govind Rubber Limited  with branch  network  of  45  numbers  and  6,000  dealer  base. This company has a sales force of 250 persons spread across India.

A few years back, Govind Rubber had showcased at Eurobike, their newest range of foldable tyres.

JK TYRE & INDUSTRIES

This Raghupati Singhania controlled company is part of the JK Organisation. The Rs 7328 crore company (Includes revenues of its wholly owned subsidiary JK Tornel, Mexico) was recently in the news that it was buying Birla Tyres, a part of Kesoram Industries. JK Tyre has, however, denied this news.   JK Tyre is a leading four-wheeler tyre manufacturer in India and amongst the top 25 manufacturers in the world with a wide range of products catering to diverse business segments in the four wheeler automobile industry. The company has a global presence in 100 countries and has six plants in India and three in Mexico. Currently, the capacity across 9 plants exceeds 20 million tyres per annum.

JK Tyre pioneered radial technology in India in 1977 and is currently the leader in Truck Bus Radial segment. The company offers four wheeler tyres for the entire range - Truck/Bus, LCV, Passenger Cars, MUV and Tractors. The company is the manufacturer of India’s largest OTR Tyre weighing 3.7 tons and 12 feet high. JK Tyre is a preferred supplier to the automotive Original Equipment Manufacturers and is a partner to some of the biggest names including Maruti Suzuki, Tata Motors, Honda, Ashok Leyland, Mahindra & Mahindra, Volvo Eicher, General Motors, Volkswagen, Fiat, Nissan, TAFE, BEML and Caterpillar India.

Its nationwide network comprises of 143 selling locations, 4,000 dealers and over 120 retail outlets branded 'JK Tyre Steel Wheels', which are equipped with state-of-the-art wheel servicing equipment. It has also established 17 Truck Radial Tyre Care centres, which operate along all major National Highways on 365 day, 24x7 basis. JK Tyre has established over 14 truck radial total solution showrooms branded “Truck Wheels”.  It was the first to introduce unique concepts like “Dial-a-Tyre” and is the only tyre company to launch a 24x7 on-road tyre assistance initiative called “Fix-a-Tyre”. 

When it comes to motorsports, JK Tyre is a name to reckon with. The Racing and Karting programmes supported and conducted by the company are the breeding ground for the country's young motorsport talent and JK Tyre prodigies like Karun Chandhok, Armaan Ebrahim and Aditya Patel have done India proud in the global arena.

Early this year, JK Tyre & Industries Ltd added another feather to its cap for its Passenger Radial Tyres, when it was ranked highest in the JD Power 2015 India Original Equipment Tyre Customer Satisfaction Index. JK Tyre received the highest rank for its superior quality and many years of relationship with the Indian consumers, in the TCSI Study conducted annually by JD Power.

The company recently launched its exclusive range of highly advanced multi-terrain tyres- Ranger in Panaji, Goa. With the Ranger series, JK Tyre aims to augment its presence in one of the fastest growing segments in the Indian auto industry i.e. the Sports Utility Vehicle segment. JK Tyre will export the new range of tyres to its international markets.

The tyres come in 10 sizes and therefore work best with a variety of SUVs available in the Indian market, viz., Audi Q-series, Land Rover Freelander, Fortuner, Nissan X-trail, Terrano, Pajero, EcoSport, Duster, and many more.

Vivek Kamra, President – India Operations, JK Tyre & Industries Ltd said, “Technology & R&D have been the driving forces at JK Tyre. Aspiring to augment our presence in each and every product segment, Ranger Series is yet another marvel from our state of the art R&D facilities.” He also added, “Being a customer centric company, this product reiterates our commitment to identify new and emerging customer needs and proactively introduce technologically advanced products to keep pace with changing market scenario.”

Ranger Series has been rigorously tested globally by the company’s professional race drivers on various terrains and has been assessed as best in class in handling, grip and braking. JK Ranger AT Series stops within 4 seconds; be it dry road or wet road (Dry road 100 to 0 kmph in less than 4 seconds and for wet roads 80 to 0 kmph in less than 4 seconds).

METRO TYRES

Metro tyres, since its inception in 1968, have been a major player in bicycle tyres and tubes in India. Apart from bicycle tyres, the company makes motorcycle tyres, three-wheeler tyres and auto tubes. The company has a technical collaboration with Germany’s Continental AG. Metro International is the export division that works with the company’s overseas clients. Under the aegis of Metro Ortem Limited, the group has diversified to manufacture and export a whole range of home appliances including fans and sewing machines.

The Group has seven certified, state-of-the-art manufacturing facilities, producing tyres and tubes for bicycles, motorcycles, scooters and three wheelers. Metro Tyres has a manufacturing capacity close to 30 million tyres and 30 million tubes annually.

Apart from a technical collaboration with Continental AG for motorcycle and scooter tyres under Continental Metro brand name in India, it also has an outsourcing agreement with Continental AG for motorcycle tyres and tubes and automobile tubes under Continental brand name for their global requirements.

MICHELIN INDIA

Michelin is a French company that is second largest tyre manufacturing company in the world after Bridgestone. Michelin came to India almost a decade ago. Michelin’s range of products in India caters to the Passenger Cars, Truck & Bus and Two Wheeler & OTR (Off the Road) vehicles segments.

Michelin’s customer touch-points spans across India and comprises of TyrePlus, Michelin Priority Partners, Michelin Truck Service Center and Recamic.

In 2009, Michelin Group and Tamil Nadu government signed a Memorandum of Understanding (MoU) for Michelin’s tyre manufacturing plant. This 290 acres facility is currently focussed on manufacturing a range of Radial Truck/Bus tyres.

In Q1, 2014, the manufacturing plant near Chennai started commercial production of Michelin radial truck tyres.  In July 2015, the company announced that it has been awarded the ISO 9001 and ISO/TS 16949:2009 Quality Management System Certification for its Chennai manufacturing facility UTAC (Technical Union for the Automobile, Motorcycle and Cycle Industries).

According to news reports, Michelin will be significantly raising production in 2015 to 16,000 tonne from 11,000 tonne, riding on a growing demand for radial tyres. The company is planning to set up an R&D facility in India.

MRF Limited

Madras Rubber Factory, now MRF, is India’s largest tyre company. Not many may be aware, but this Tamil Nadu based company started as a balloon company in 1940’s with a funding of Rs 14,000. It has come a long way since then and boasts of a turnover of more than Rs 14,000 crore and around nine plants across the country. It was founded in 1946 by K M Mammen Mappillai. Today, apart from making tyres, the company is actively involved in the field of motorsport, in cricket, in boxing, in toys and paints, among others. It has 6 facilities.

It was only in 1952 when the company changed course and turned to tread rubber manufacturing. By the early 60’s, MRF was exporting its quality tyres to offices overseas in the U.S. and Beirut and soon made its presence known globally across 65 different countries - with tyres rolling out of 6 interdependent facilities built across 450 acres, 3000 strong dealer networks and 180 different offices.

In the field of sports, MRF had set up the MRF Pace Foundation under the legendary Australian bowler Dennis Lillee. As for motorsports, the company is involved in racing, go karting, rallying and various other motorsport events. Its rallying team has won the prestigious FIA Asia Pacific Rally Championship a few times.

It was in 1961 that MRF became a public company and established a technical collaboration with the Mansfield Tire & Rubber Company based in USA and the then Chief Minister of Tamil Nadu K. Kamaraj released the first tyre from MRF’s new pilot plant at Tiruvottiyur.

In 1967 MRF became the first Indian company to export tyres to the very birthplace of tyre technology, the United States. The company’s second plant opened at Kottayam in Kerala in 1970 and a year later its third plant was inaugurated in Goa. The fourth plant came up in Arakkonam in Tamil Nadu. In the years that followed, the company introduced a series of tyres for cars, trucks and two-wheelers.

In 1989 it collaborated with Hasbro International USA, the world's largest toy makers, and launched Funskool India. The Company also entered into collaborations with Vapocure Australia to manufacture polyurethane paint formulations and with Pirelli for MUSCLEFLEX Conveyor & Elevator Belting. The same year, the company also opened another unit in Medak (now a district in Telangana). The year 1996 was MRF’s golden jubilee and it started a special factory dedicated entirely to the manufacture of radials at Pondicherry. In the year 1997 MRF ventured into F3 cars for the very first time.  In 2011 MRF commissioned its seventh plant at Ankanpally (Andhra Pradesh). The eighth plant followed for the production of conventional tyres in Trichy (TN). In 2012

MRF commissioned its 9th plant in Trichy (TN) solely for the manufacture of Radial Tyres.

TVS SRICHAKRA LTD

TVS Srichakra Limited, a part of the TVS Group, the largest auto ancillary group in India, with a group turnover of over USD 8 Billion, is the leading manufacturer of Two & Three Wheeler tyres and Off-Road tyres. Incorporated in 1982, the company manufactures and markets its products under the ‘TVS Tyres’ and ‘TVS Eurogrip’ brands. The company rolls out around 1.9 million tyres every month out of its two units located in Madurai (Tamil Nadu) and Pantnagar (Uttarakhand).

In June 2015, the company informed the Bombay Stock Exchange that in order to meet the growing demand for two wheelers tyres in India, Michelin has entered into an agreement with it for setting up a new manufacturing facility within its existing plant in Madurai. The products designed by Michelin for the Indian market will be manufactured by TVS Srichakra at this new facility under the Michelin brand name. The TVS Madurai unit with an annual capacity of 3.6 million tyres will produce bias product ranges for both Michelin as well as some tyres from TVS’s product range of two wheeler tyres.

Early this year, the company unveiled its new brand identity with the mnemonic ‘Eagle’. In 2013-14, the company made 1.7 million tyres per month in Two & Three Wheeler segment and pushed it up to 2 million tyres per month in 2014-15.  “We have initiated an expansion in our capacity, to reach 2.3 million tyres per month by December 2015,” said P Vijayaraghavan, Director, TVS Srichakra Ltd.

YOKOHAMA INDIA

Yokohama India is a 100pc subsidiary of The Yokohama Rubber Co. Ltd, Japan. The Yokohama Rubber Company (YRC) is already running into 10th decade of its establishment in Japan. The Japanese company decided to foray into the Indian market in 2007. In November 2014, Yokohama India started the first phase of commercial production at its first tyre manufacturing unit in India at HSIIDC Bahadurgarh Haryana. With a max production capacity of 2000 tyres per day the plant can be scaled up to three to four folds in the next phases of growth. Built with an investment of over Rs.300 crore, this new manufacturing unit introduced the Yokohama Earth -1 Tyres, specially designed for the Indian road conditions for durability, mileage & noise comfort.  At the event, Hikomitsu Noji, President and Representative Director, President of Tire Business – Yokohama Rubber Company, Japan, said “Yokohama India has started its operation in 2007, and since then we were thinking the necessity of manufacturing facility in India considering import duty, inter-state tax matters and some other issues. Based on such market conditions, we have decided to have our own factory here in Haryana in 2012”.

Yokohama India is currently operating on 2pc of the total market share. While tube type tyres still contribute a considerable share of the total passenger car radial market, Yokohama India is only competing in the tubeless market.

Takeshi Fujino, Managing Director – Yokohama India also noted that “Keeping the diverse road conditions in mind Yokohama Earth-1  will cater to most of the cars in B, B+ and C-segment”.

“We plan to introduce 25 sizes of Yokohama Earth-1 and 10 S-Drive sizes” he further added.

Yokohama India currently has approx 600 point of sales which also includes 23 Yokohama Club Network (YCN) across length and breadth of India.  Globally other than replacement tyres business, Yokohama tyres is original equipment suppliers to many top of the line car manufacturers like Audi, Honda, Mercedes Benz, Mitsubishi, Nissan, Porsche, Suzuki and Toyota.

Yokohama India later introduced “Mud –Terrain (M/T+)” Tyres in it’s well accepted “Geolandar” series. Specifically designed for serious Off-Roading, the Geolandar M/T+ is well-equipped to deflect lateral impacts during extreme conditions.

Yokohama in India has been part of major motorsports activities since 2007. While it has won the Himalayan car Rallies for three consecutive years--2009, 2010 & 2011, Yokohama India has had podium finishes at all rallies the company has participated in. Over the years Yokohama has become synonymous to global Motorsports. Currently Yokohama has been the sole official tyre supplier to FIA World Touring Car Championship (WTCC) since 2006.  Yokohama also has been the sole tyre supplier for 31 consecutive years to the Mecca of Formula 3, which is held in Macau every year.