Apollo Tyres reported first quarter sales of $571.7 million and a net profit of $29.7 million.
More interesting than the financial results, though, were comments made by Apollo Chairman Onkar Kanwar at the company’s annual general meeting yesterday.
“During the last quarter, we announced the acquisition of U.S.-based Cooper Tire & Rubber Co.,” he noted in his talk. “With a rich history of working in multiple locations around the world and with diverse cultures, which is based on our core values, we remain committed to closing this compelling transaction. Both companies are working towards securing all necessary approvals to close the deal, which is expected to happen by Q3 of this fiscal.”
Kanwar continued: “The American entrepreneur Jim Rohn once said, ‘If you are not willing to risk the usual you will have to settle for the ordinary.’ Your company has always lived by this maxim. We have always strived to create new paths, and once these paths become widely trod upon we set out on newer ones yet again.
“Once again Apollo has been a cause of pride for India, the tire industry and, of course, you as shareholders. As most of you would have already read, your company is set to acquire the U.S. headquartered Cooper Tire, making your company a truly global player with 14 plants spread across India, the U.S., China, Europe and Mexico.
“Profound changes are taking place in our world,” Kanwar said in his speech to shareholders. “The so-called ‘emerging economies’ are facing new challenges, with growth in markets like India and China slowing down appreciably while Brazil, South Africa and Russia are going through a number of social changes to add complexity to their economic difficulties. On the other hand, the so-called ‘troubled markets’ like Europe are where Apollo has enjoyed its best profitability for the last few years. The U.S. is in a phase of resurgence, with growth coming back after the last few years of fiscal corrections.
“The discovery of shale oil and gas is a huge boon to U.S. manufacturing and already a number of companies, including global giants in our own industry, have announced plans for new manufacturing facilities there. What was always the largest market will now also enjoy strong growth and given the already vast potential there the numbers can be mind-boggling. To quote only one example, even a 1% growth in the U.S. tire market calls for the addition of a new manufacturing plant every year to meet the increased demands.
“A multi-polar world is what awaits us, with the U.S., Europe, China, India and Latin America all important constituents in the new global economic order. We at Apollo have put in place a strategy that recognizes this reality and ensures that we do not have over-dependence on any one geography or product category. We have tried to de-risk for your benefit, by broadening our revenue and profit streams from diverse geographies and different product categories. Your company will have equal exposure to the developed and profitable markets as also to the emerging high growth markets, a combination that very few other companies can lay claim to.
“As I stand here today my mind goes back to the same day some 30 years ago, when we were a tiny, struggling company. Many of you sitting here today were also with us then and it is the trust and confidence that you placed in us that have always been our guiding light and inspiration. Much has changed in these years, but your faith in us, and our focus on maximizing your investments has always remained unchanged.
“The Indian economy is passing through challenging times,” Kanwar said. “Growth has slowed down, traditional export markets are being attacked by other competitors and the rupee is a pale shadow of what it was. This is a time for bold action on the part of governments, corporations and individuals. It is time we all started thinking as Indians and forget the divisions that we have on the basis of religion, geography, economic status or ideological belief.
“It is time for us to think of India, and work towards a stronger and more united country. I have always believed that lasting individual success can never come at the cost of the collective good, rather the only way for all of us to achieve our dreams as individuals is if we dream together as a nation and work towards the fulfillment of that dream.
“This is also why I have always espoused the value of the family unit. At Apollo we all see ourselves as members of a big family, whether as shareholders, employees, suppliers or business partners. That is the underlying reason for our strength as an organization and we have the courage to break new ground every time. It is the confidence that the family will take care of all of us and help us and support us, so that we in turn can help and support the family. This is the time for the whole country to start thinking in this manner.
“Challenges will keep coming our way, but I want to assure you that we have the skills, the knowledge, the attitudes and above all the resolve to take on any challenge and overcome it,” he said. “Commodity prices will fluctuate, as will demand. However, the initiatives that we have been putting in place will ride out these short-term issues. We have invested in brands, in technologies and in markets to ensure that Apollo becomes stronger by the day, and able to take on bigger and bigger challenges. For, it is behind these challenges that scare lesser mortals and organizations, lay the really big opportunities and rewards.
“I would like to end by thanking the governments of all the places where we operate, for always providing us the support we need,” Kanwar said. “Heartfelt thanks go to all our banks and financial institutions who have always offered us all the assistance and help we need. I would like to thank my board for always being there with wise counsel and encouragement, and for challenging us to stretch ourselves to achieve more.
“Thanks go out to all our partners, whether those who supply us, or those who sell our products or those who use them, for it is you who always inspire us to come out with newer and better products. I would like to thank all my colleagues, who support me as a team that I can be truly proud of, and who give me the confidence that anything is possible with such colleagues. But most importantly, I would like to thank each one of you for the faith that you have put in your company and your team. Our biggest consciousness is that we are the custodians of your trust and everything we do will always seek to repay that many times over on a sustainable basis.”
