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
‘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).
Earlier this year, your company TVS Srichakra unveiled its new brand
identity with the mnemonic ‘Eagle’. Are you trying to send across a message to
the world around you, especially to the consumers in India and abroad?
While creating a new brand
identity, we had to make sure that we integrate a feeling of dynamism and
youthfulness to convey that our products can overcome any challenge in a
journey. The new logo, as a result, is
sleeker and bolder, conveying strength, speed and dynamism. As a youngest tyre company in the country, we
are happy to have launched this new logo and embark on this new journey.
TVS Srichakra is a leading manufacturer of Two & Three Wheeler
tyres and Off-Road tyres and you have plants in Madurai (Tamil Nadu) and
Pantnagar (Uttarakhand). What are the
production capacities of the two plants and is it sufficient to meet your
immediate future demands?
In 2013-14, we 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.
How much of your total revenues come from exports and have you in the
past one year found new markets for exports? Again, is there a huge scope for
exporting both 2/3 wheeler tyres as well as off road tyres globally? Also, what
is the share in the OEM and aftermarket segments?
We export Off-Road tyres to
more than 80 countries, branded as ' TVS EUROGRIP ', which include Industrial
Pneumatics tyres, Skid Steer tyres, Multi Purpose tyres, Flotation tyres,
Construction tyres, Tractor tyres, etc. Around
13pc of our total turnover comes in exports.
In Off-Road tyres, our main market is Europe and USA as well as Middle
East, etc. We are also increasing our
exports in Two / Three Wheeler tyres to South America, South East Asia and
Africa. With increasing exports of Two
Wheelers from India, we have greater opportunities to expand our exports in Two
& Three Wheeler tyres segment.
Are tubeless tyres making a stronger presence in the Indian markets? Is
the technology here evolving?
The Indian Two Wheeler
industry is seeing rapid modernisation in the vehicles as well as in
tyres. With increasing exports by the
Two Wheeler manufacturers to global market place, vehicles are getting upgraded
to a much superior technology. In tyres,
from Tube Type, we are seeing a quick change to Tubeless tyres. Most of the vehicle manufacturers roll out
their new models with Tubeless tyres. We
are also seeing Radial Motorcycle tyres coming in. In Off-Road segment, TVS Srichakra has got
into Tractor Radial tyres for European market, to begin with.
Talking of technology, can you throw some light on your R&D set up
and how critical it is for the company?
We have an excellent In-house
R&D setup, with Tyre Technologists and Tyre Engineers designing and
developing newer generation tyres. We
have Design Centre, well equipped Laboratories and our own Test Track in the
plant for constant Road Testing of tyres.
We have test drivers, who also commute 500 kms every day testing our
tyres. We have support from consultants
who have been experts in the tyre field, from Europe & Japan and USA,
helping us in various facets of tyre development and testing.
Since you are the largest supplier to 2/3 wheeler industry in India,
how do you feel their demand will pan for the current fiscal, especially with
news that rains could falter and thereby affect demand for two wheelers in
rural areas? Also do you see the growth of the scooter market as a major respite
of sorts, because scooters are generally in the urban domain?
We expect the Two Wheeler
industry to grow by 7% to 8% this year.
Though there is a drop in the growth as compared to the last three
years, when we witnessed a big double digit growth, I do see an increase in
numbers in 2015-16. The growth in scooter
segment will be higher as compared to motorcycle segment.
For a long time petroleum prices have been plummeting but now they seem
to be firming up. And with a possibly scanty rainfall, how do you foresee the
prices of your raw materials affecting your bottom lines of the company?
We have seen Natural Rubber
price being steady, but we do expect an increase in the prices of Synthetic
Rubbers, Carbon Black and Rubber Chemicals, by the end of the year.
Some time back there were frequent demands from the tyre industry to
stop dumping of tyres from countries such as China? Has this issue been
addressed completely? Are there any similar threats that need to be addressed
by the government now?
ATMA has been playing an
excellent role in bringing to the attention of the Government, on the import of
cheap tyres from China, in particular in the Truck and Car segment. We have been pressing the Ministries on
Anti-Dumping Duty including in Two Wheeler tyre segment. We are in constant touch with the Government
in this regard.
How successful has your company been on the radialisation front, with respect to the products you make and the demand for it, therein?
We will be releasing our Radial Motorcycle tyres soon, having done the development and testing. We have already developed Tractor Radial tyres and have given quantities in the European market for initial usage. We have plans to expand our range.
Lastly, are there any plans to expand further, either through the organic route or through the inorganic route in the coming years? Is that an option you are considering? On the product front, do we see new products being launched this current fiscal? Any plans to enter the four-wheeler segment?
We will be expanding consistently our output, in both Madurai and Rudrapur plants. We are not looking at any greenfield project now and would only be concentrating with expansion in our two existing plants. We launched 14 new products last year and, we have lot more newer products coming in during this financial year, both in Motorcycle and Scooter segments.
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