Each year, it gives me great pleasure to share with you the key
milestones and achievements of Apollo Tyres which, with your continued
support over the years, has moved from strength to strength. At Apollo,
we have always strived to ensure that through each activity we
undertake, we are able to create value for you and deliver products and
services for our customers which ensure their comfort and safety.
The year gone by was truly special for us. To begin with, Apollo Tyres
became the first Indian tyre company to cross the annual revenue
milestone of over Rs 12,000 crores or US$ 2.5 billion in FY12. It has
been an extremely challenging year, but despite that we have registered
a 37% growth and added half a billion dollars to the company''s
top line. It is quite amazing to think, that it took us 28 years to
reach a revenue figure of US$ 500 million, and today, when we grow by
an equal amount in one year, we still seek a greater challenge on your
But let me put this in some context. In current times, economies across
the globe are laboring to overcome low consumer sentiments and issues
of debt refinancing. Even in a country like India, which is considered
a high growth economy, this past year the GD Phasat best grown at around
6.5%; with flat growth in the automotive sector across all vehicle
types. In fact, April 2012 has recorded the lowest automobile sales in
10 years in India! In our 2 other large markets, overall economic
growth has been slow. South Africa continues to recover from the
aftermath of the global financial crisis; while Europe registers at
best growth rates of 2%, which is considered good.
Combined with this, was a year where raw material costs were more
expensive by over 32% compared to the year before; along with a host of
other factors like our inability to pass on higher input costs to our
customers, an inverted duty structure, currency fluctuations and
competition from cheap imports.
However, with Apollo Tyres'' operations in Africa, Europe and India,
and nearly 118 export destinations, the company is not overly dependent
on any one market; this has allowed us to focus on other crucial
factors like research, manufacturing excellence, product performance
and safety, and enhancing service delivery.
In FY12, Apollo''s focus and hard work on ultra high performing
passenger vehicle tyres paid off handsomely. This is apparent in the
fact that sales of Apollo branded tyres has doubled in the most
competitive global market - Europe. In addition, at the Geneva Motor
Show, easily counted amongst the grandest automotive extravaganzas,
your company launched Apollo Aspire 4G -- an ultra high performance
tyre to cater to high end European cars. Simultaneously, for our
premium passenger car tyre brand Vredestein, more new generation
passenger tyres were introduced to further cement the brand''s
position in the lucrative niche space it occupies.
In addition, we are continuing our efforts in expanding and
consolidating our existing markets. Dubai, an arm of Apollo''s India
operations, proved to be an ideal hub to cater to the Middle Eastern
region. The performance of this expansion has been worthy, nearly
tripling our revenues from the region and poising Apollo for take- off
in the coming year. The performance of the Dubai office has given us
the confidence to further expand operations in the South East Asian
region over the coming year.
However, what gives me most pride to report to you is our increasing
community and green engagement. We have undertaken a complete audit of
all our operations globally and our offices on critical environmental
factors and have put in place systems to make Apollo a green
company. Our efforts in general health and HIV-AIDS awareness and
prevention too, have been strengthened, with currently 21 health care
centre''s across the country catering to the commercial trucking
community. For youth and women''s empowerment and skill building for
self-employment, around all 4 manufacturing units in India, we have
embarked on Project U - which educates, trains and undertakes
livelihood creation for the young unemployed.
Last but not the least, Apollo''s leadership team is constantly
looking at ways to better internal efficiencies and operational
effectiveness, with a clear focus on product and process quality. When
one decides to lead in an industry where day-to-day survival is a
struggle, it is but natural that discovering opportunities in every
challenge and finding innovative solutions becomes a way of life! I am
confident that Apollo Tyres will be able to outperform itself once
again in the coming year.
Wishing you all the very best.
ONKAR S KANWAR
Chairman & Managing Director