Expect to produce 6,000 radial tyres per day: Apollo Tyres

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Expect to produce 6,000 radial tyres per day: Apollo Tyres

In an interview with CNBC-TV18, Neeraj Kanwar, Vice Chairman & Managing Director of Apollo Tyres spoke about the latest happenings in his company and sector.

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In an interview with CNBC-TV18, Neeraj Kanwar, Vice Chairman & Managing Director of Apollo Tyres spoke about the latest happenings in his company and sector.

Here is a verbatim transcript of the exclusive interview with Neeraj Kanwar on CNBC-TV18. Also watch the accompanying video.

Q: We believe there has been some trouble for the tyre makers in the CV space, primarily because you are suffering with an acute radial tyre shortage. Is that true and how tough is the situation?

A: I don't think that is a big problem. The tyre industry, we together are spending close to Rs 5,000 crore in putting up our truck radial facilities all across India. We will be in a position to meet up the demand by the CV segments, especially Tata Motors, Ashok Leylands in the coming years. So I don't see that as a big problem for the tyre industry.

Q: How much of expansion do you see on the radial front and how much do you see it contributing to volume growth ones this capacity comes in on the radial front?

A: I can tell you for Apollo what we are doing is that we had got the approval for setting up a Greenfield plant in Chennai for producing truck radials. That plant is going on stream in the month of March of this year. We expect to product 6,000 truck radials by the end of this year on a daily basis. That in itself will be India's largest truck radial plant. I know the remainder of the tyre industry is also putting up huge capacities in the range of 2,000-3,000 truck radials per day being produced by various competitive companies.

I believe that starting in April where the CVs have been started to request for truck radials, I believe we will be supporting them and we will be meeting the demands coming in from them. There will be a volume growth certainly of nearly 100% because most of us are not producing truck radials today. We are only producing pilot projects of nearly 400 tyres per day. So for Apollo the capacity is going to go from 400 tyres per day to 6,000 tyres per day and I think that should be good quantity for Indian CV market that is requiring truck radials today.

One point is that vehicle manufacturers (OEs) had themselves not predicted that truck radial tyres would be required by them and this is not a stopgap arrangement because we do need 12-18 months to put up a project in our industry. Timely decisions have been taken in the past year and there are all companies in the tyre industry who have invested close to Rs 5,000 crore. But those tyres will only start coming-in in the months of April and May.

So the prediction of this growth of CV market or CV OE manufacturers didn't make out properly and we also did not get warnings signals to put up these capacities before. But nevertheless we are on time and starting April of 2010, we should be able to meet their demands.

Q: You will be upto full capacity by April on your truck radial front because as we understand it companies like Ashok Leyland have cut down production by 20% that is a pretty drastic figure?

A: We will not be upto terminal capacities, we are just starting commercial production in the month of March and in April we will see only one-third of that capacity coming in and gradually as we go into Q2 we should be reaching half of the capacity and by Q3 we sold be achieving the terminal capacity.