Aug 24, 2012, 05.57 PM IST

Lower rubber price in last one month benefiting co: JK Tyre

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Over the last few days the auto ancillary space has been abuzz. Even tyre companies have booked profits. Vikram Malhotra, VP Marketing & Sales at JK Tyre said rubber prices have softened in the last one month and the company has benefited from it. However, he emphasized on the fact that other costs have been rising and this has neutralised the impact of softening rubber prices.

The influx of Chinese tyres in the car radial segment has caused significant competition for JK Tyre, said Malhotra and "That is impacting the entire industry," he added.

Here is the edited transcript of the interview on CNBC-TV18.

Q: Can you take us through the dynamics of rubber market and whether you continue to expect prices to be soft?

A: Yes, rubber prices did slacken during the last one month but if you look at the rubber prices the prices of natural rubber was higher. The average was higher in April compared to January-March. However we have taken some benefit of the rubber prices in the last two months.

But rubber is not the only input cost for us, crude is also going up. The issue is once crude starts going up we need to look at the whole picture. Crude has now touched USD 112 per bbl and in the month of June it was USD 95 per bbl. Yes, rubber is slackening but taking into consideration the volatility that has taken place during the year it is quite difficult to predict what is going to happen in September and October.

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