The Kochi unit of Apollo Tyres Limited at Kalamasserry has contributed significantly to the consolidated growth of the company over the decades
Apollo Tyres Limited is one name that echoes international quality in the corporate annals of Kochi. Established in 1972 at Perambra in Thrissur, Apollo Tyres Limited has grown over the years into a multinational entity of repute in the tyre manufacturing sector. Its Kochi unit, situated at Kalamasserry, has contributed significantly to the consolidated growth of the company over the decades.
The company, with its headquarters at Gurgaon, has manufacturing presence across three continents. A leading player in the truck-bus ‘cross ply’ and radial categories, the company has achieved a net profit of Rs.6.1 billion in 2012-13. The company has acquired well known entities such as Dunlop Tyres International (Pty) Limited, South Africa, and Vredestein Banden BV, Netherlands. Talks are on to acquire Cooper Tire and Rubber Company, which is a premier tyre manufacturing company in Europe. The brands under the company umbrella include Regal, Kaizen, Maloya and Dura. Apart from Kochi and Perambra, the company has several other manufacturing units within and outside the country. A modern unit at Chennai is the latest addition to the manufacturing wing.
Economic growth has a great role to play in the performance of the tyre industry. Slowdown in economy would have an adverse impact on the industry as well. Though the Indian economy registered a growth rate of over 5 per cent, the industrial output had come down from 3.4 per cent in 2011-12 to 1 per cent in 2012-13. Despite weak sentiment in the automotive industry, the Indian tyre industry grew by around 8 per cent in 2012-13. Indian tyre manufacturers made about 125 million tyres, with seven leading players making 80 per cent.
The average sales volume for truck-bus ‘cross ply’ category shrunk by about 4 per cent. Similarly, light truck-bus ‘cross ply’ category dipped by about 5 per cent. But industrial tyres category saw a sales volume growth of about 103 per cent in 2012-13.
In such a scenario, Apollo Tyres registered a 5.28 per cent growth in revenue and 29.39 per cent growth in operating profit in 2012-13 despite negative factors such as global auto slowdown and imports from China and South Korea. The company achieved sustained growth as a leading player in the commercial vehicle segment though it does not manufacture tyres for the two and three wheeler segment which has high demand in the country.
Apollo Tyres has embarked on a sustainability drive. Accordingly, a sustainability management framework has been introduced. Carbon footprint mapping has been completed at the manufacturing units in India. Global reporting guidelines have been adhered to by the company to disclose its environment and social performance during the past two years. The measures are aimed at addressing issues pertaining to energy, water, waste and biodiversity. The initiatives include zero waste water discharge at all the manufacturing units in Kerala.
N. Sreekumar, former head of factories of Apollo Tyres Limited in Kerala, said it was Apollo Tyres which successfully brought in a productivity oriented work culture in Kerala. The company has ensured higher ages for the employees, while stressing on the fact that productivity should also be on the high.
He recalled that Raunaq Singh started the venture at Perambra with the support of the Kerala State Industrial Development Corporation. The State government has a shareholding of 1.98 per cent while the promoters hold 46.94 per cent.
Mr. Singh’s son, Onkar S. Kanwar, took over the reins of the company in the eighties. Though the company went through a bad patch for a few years, the performance improved post-1988, after Mr. Onkar strengthened the marketing wing and introduced better technology. The company started its second unit in Baroda and later, took over Premier Tyres, Kalamasserry. The role played by late Congress leader K. Karunakaran was instrumental in the acquisition that opened a lot of employment opportunities in a company of high standards in Kochi. Gowriamma, Aryadan Muhammad, P.K. Kunhalikutty, K.N. Ravindranath are among others who extended help which had contributed to the health of the company over the years. Apollo Tyres went on to acquire more companies internationally. “Today, it is the seventh largest tyre manufacturing company in the world. Neeraj Kanwar, son of Onkar S. Kanwar, has joined the company, strengthening the management further,” Mr. Sreekumar said.
The Kalamasserry unit, with about 800 employees, manufactures off the highway (OHT) tyres. The Perambra unit manufactures radial tyres. As carbon black, an ingredient in the manufacture of tyres, caused pollution, there was a move to shift the Kalamasserry plant to Perumbavoor. But the company later decided to do the mixing up operation at Perumbavoor without shifting the manufacturing unit from Kalamasserry. With high productivity and cordial management-employee relations, the Kochi unit is poised to make strides in the coming years, according to him.