Below is an excerpt of a speech from Onkar S. Kanwar, chairman of the board of Apollo Tyres Ltd., on the state of the tire industry in India and Apollo Tyres’ accomplishments of the last year and what’s to come.
“It gives me great pleasure to welcome you to the 45th Annual General Meeting of Apollo Tyres Ltd. The Board’s Report and Audited Accounts for the financial year ended March 31 are with you. With your permission, I shall take them as read.
“Uncertainty has become the new normal … in the year gone by, we have come to expect the unexpected: the changing world order, alliances breaking up and life-long partners in public fights, protectionism by countries either from an economic or immigration perspective and many more uncertain events across the globe. However, in India, we have always been used to living on the edge, from droughts to floods, from one extreme to another, and are always used to fast-changing realities.
“Other countries and economies have only recently started adapting to this ever-changing and uncertain world and we have an inherent advantage now. According to the International Monetary Fund (IMF) data, the global economy posted a robust growth rate of 3.8%, powered largely by India and other emerging economies.
“Your Company has been no stranger to uncertainties. In fact, time and again, we have gone against the tide and acted differently and from an outside view, forced elements of uncertainties to our operations. We invested in the Chennai plant when conventional wisdom dictated to avoid any investments during recessionary times and made international acquisitions when we were told to cover our flanks in India.
“Before I dwell on Apollo Tyres and its operations, I would particularly like to mention the Government of India, which listened to the pleas of the tyre manufacturers in India to impose customs duties on the low-cost Chinese imports. These low-cost imports had been wreaking havoc on the manufacturers in India and also on the customers who buy the low-cost products but are not aware of the safety issues, as the tires have not been tested on the Indian roads. By leveling the playing field, the Government has done tremendous service to the industry and to the millions of stakeholders who depend on it.
“The year gone by for Apollo Tyres was an important journey in our long-term vision – ‘To be a premier tire company with a diversified and multinational presence’. The year saw your Company continue its journey with a laser-sharp focus on three paths – consolidate our market position in existing markets and seek new markets/segments; continue investment in both brands – Apollo and Vredestein – and capacity expansion via Greenfield facilities, and to seek other growth opportunities – and we crossed several milestones in the process.
“Your Company’s Asia Pacific, Middle East and Africa Operations achieved revenues of over Rs 10,000 crores. Importantly, in May 2018, JD Power, the gold standard in customer satisfaction survey fortiree companies, ranked your Company the highest in the small car segment and #2 in the midsize cars or sedan segment in India. The ranking is a testimony of our consistent efforts towards improvement in product quality across categories. The ranking is a great achievement, considering that the segment accounts for more than 50% of all the cars sold in India. Your Company has a market share of 30% in the Original Equipment (OE) segment in India for small and midsized cars and you will see the Company’s tyres OE fitted in eight of the top ten cars being sold in India.
“In pursuit of our strategy to expand our capacities across the globe, we inaugurated our Hungary plant and also announced the setting up of another plant in Andhra Pradesh. It is with a sense of pride that I tell you that your Company today has six plants across the globe and the seventh plant will be ready in the next two years. It is indeed a proud moment for all of us, as I remember that in a short span of three decades, we have charted a growth story from a single struggling plant to a global powerhouse. 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 other big achievement for the Company during the year was being successful in getting orders from the OE players in Europe. It is heartening to note that your Company’s premium brand, Vredestein, has been selected as a fitment on the Volkswagen Polo, SEAT Ibiza and Ford EcoSport and the supplies have already begun to these auto makers. Unlike India, where we have deep relationships with almost all leading auto manufacturers, we have largely been a replacement marked focused company in Europe. With the Hungary plant now producing the best-in-class products, we will aggressively seek more business from the European auto manufacturers.
“And this is to all the football-loving people and I know that the people of Kerala are passionate about football. Again, going against the tide, where a large majority of companies support cricket, your Company has been focusing on football for the last few years. I think that football is creating a distinctive identity for the Company and helping it stand out from the crowd that flocks to cricket. Further, the sport makes us highly visible among the young generation, a key audience for us. Taking this into account, last year, we made an entry into Indian football and joined hands with two teams in India as the principal sponsor of the Chennai-based Chennaiyin FC in the Indian Super League, and as the title sponsor of the Mohali-based I-league team, Minerva Punjab FC. I am glad to mention that both the teams won the titles in their respective leagues. Last year, we also launched the hugely successful Apollo Half-time Spectacle during the ISL, which, I am sure, many of you would have seen, where world champions displayed their freestyle football skills for Indian audiences.
“Kerala has always been very close to me and your Company and hence, many of our Corporate Social Responsibility (CSR) initiatives are made for Kerala. We continued to work on our mangrove conservation project in Kannur district and other projects for the underprivileged women. Your Company inaugurated a rubber sheet making unit in Kottayam for the rubber tappers’ wives. The unit will be run by a group of women who have been trained by your Company, in association with the Rubber Board of India, on rubber tapping, sheet making, sheet smoking and general entrepreneurial skills. The initial results indicate a jump in the income of the women working in the unit. We are now planning to replicate this model soon in other Panchayats of Kottayam, which will empower more women.
“Looking at the year ahead, there will be challenges to be faced, uncertainties to be taken care of… yet, I continue to be bullish on our key markets – the APMEA and Europe regions. This confidence is due to the trust continuously reposed by each one of you, our valuable shareholders. I would also like to thank our bankers, various financial institutions and the various State and National Governments where we operate, and the network partners and business partners who have allowed us to surpass the goals we had set for ourselves. Finally, and most importantly, my colleagues, who take your faith and translate it into achievements for all of us to be proud of; without them, we are nothing.”
Thank you.
Onkar S. Kanwar
