What makes this emerging tyre magnate distinct is his imposing presence and clarity of perception.

Neeraj R.S. Kanwar’s association with Apollo began way back in 1991 as a summer trainee in Kochi, Kerala. A graduate of Lehigh University in the U.S., he had a couple of brief stints as a management trainee with the American Express Bank, New York and the investment banking division of Global Finance Limited, before he joined the corporate financing and leasing operations division of Apollo Finance Ltd.

Kanwar moved to Apollo Tyres in 1995 as manager of product and strategic planning, where he was instrumental in building the crucial bridge between the two key functions of production and marketing. In 1998, Kanwar became director and chief of manufacturing and strategic planning. During this time, he orchestrated path-breaking changes in industrial relationship management, upgradation of technology, benchmarking on product and efficiency parameters and extensive use of information technology.

A hands-on manager, Kanwar took over as the COO in July 2002. As COO, he implemented key changes in human resources, IT management and in increasing the competitiveness of Apollo products across the board. In January 2006, the board of directors designated him as joint managing director.

Currently steering the company’s $2 billion millennium mission, Neeraj R.S. Kanwar touches upon a wide range of issues covering the entire spectrum of the industry during an interview with Rubber Asia.

Q: As one of the youngest and most vibrant faces of the Indian tyre industry, how do you assess the changing scenario of the industry in India and globally?

Kanwar: I am of the view that the Indian tyre industry has a long way to go. First and foremost, it needs to be a single entity, despite the business competition in the market place. In fact, there is ample scope for collaboration in various fields.

Leadership through innovation and collaborative effort hold the key to the progress of the Indian tyre industry. This is exactly what is happening in the West. Continental, Bridgestone and Michelin fight in the market, but in the backyard they cooperate in the larger interest of the industry. This is yet to happen in India. My idea is to gain leadership through innovation and collaborative approach and we are driving this idea quite earnestly.

Q: Your grandfather, Raunaq Singh, built up the Apollo empire from scratch. Your father, Onkar Kanwar, after a lot of firefighting, made it one of India’s top tyre companies. As the third-generation representative at the apex of ATL, what is your agenda?

Kanwar: There is no specific agenda as such. We continue to believe in adding value to our stakeholders and the 3,000-strong exclusive dealers, who are our extended family. And, there are our buyers across the globe. People are our greatest asset. We owe them value and towards this end we drive on with a passion.

Q: How do you visualise the Indian tyre scene by 2010? Do you foresee multinationals outsmarting Indian companies?

Kanwar: My perception is that the Indian companies will continue to dominate on the strength of their distinct advantages. For multinationals, it will be only a slow growth in India.

Q: Do you have any technical tie-ups? Where do you stand in terms of technology compared to world tyre majors?

Kanwar: We are not for any competition, but we are proud that we are now in a position to take on anyone in the West, thanks to the strides we have made in developing in-house technology. We also have the best professionals. We don’t have any technical tie-ups and we also don’t believe in being dependent on the technology of others. Currently, Apollo is in the process of building up the best technological platform to produce the best-quality tyres on par with our counterparts abroad. The recent launches of UHP tyres namely Apollo Acelere Sportz and W-speed rated Apollo Aspire tyres was only a hint of what we are up to in the high-end segment of tyres. You have to keep your eyes always open. If you blink, then somebody will overtake you.

Q: You have had enough experience in doing business in different parts of the country in the last three decades. According to you, which is the best state in India to do business?

Kanwar: It varies from industry to industry. As far as our business is concerned, we feel that Tamil Nadu is an ideal state to set up a tyre industry. That was why we chose that state to set up our Rs 5,000-million radial tyre hub near Chennai. The proximity to NR supply base, availability of a modern port and other good infrastructure were the factors we considered mainly.

Q: What’s your assessment of the cost of labour in different states as well as countries especially as you have enough experience in operating in different states and have of late entered into South Africa?

Kanwar: The labour cost is quite high in India, especially in some states like Kerala, whereas it is several times cheaper in regions like Eastern Europe where it is only $150 per worker as against $400 to $600 in India. The productivity also does not match the cost of labour in India, whereas it is much better in Eastern Europe. In South Africa also, the cost of labour is higher.

Q: Tie-ups attempted by Indian tyre companies with Michelin have always proved to be fiascos, the latest being your much-publicised JV plans with that company. Could you tell us where it went wrong? Do you think it was a wrong step?

Kanwar: Though the JV plans under the Michelin tie-up did not take off as expected, both of us benefited a lot from the association. We appreciate and understand the reservations of any company to part with its technology. It was this realisation that led us to develop our own technology platform to compete with others. In fact, Michelin still holds 12% stake in Apollo, and we are still good friends.

Q: Are you already the number-one Indian tyre company? If so, what’s next in your road map?

Kanwar: We frankly don’t believe in any ranking exercise. Ultimately, it’s the customer who has to give us a tick mark, and that’s what we value the most. But, it’s already obvious that we are number one in terms of margin among the Indian tyre companies. It will only be a matter of a few months before we reach the top slot in terms of total revenues, that is, by the end of the 2006-07 fiscal. As regards our road map, we have very consciously set a target of becoming an India-based major global tyre company with a turnover of $2 billion by 2010. It’s our mission, which is alive and on.

Q: What are the most important lessons you learnt in your professional career?

Kanwar: Firstly, it is the importance of good communication. Secondly, transparency, and lastly, the importance of building up a good team. As soon as I took over as COO, I made it a point to establish a good rapport with every employee through regular visits to our facilities and get to know their views and issues. This helped me build up a good team. As for transparency, a typical example was that of our chairman, Onkar Kanwar, having gone live on air communicating with our employees across the country about our decision to acquire Dunlop South Africa before going to the press and the public.

Q: On the IT front, Apollo claims to be the most IT-savvy tyre company in India, overtaking many of your competitors. How did you go about it and what benefits did you get from your IT initiatives?

Kamwar: I am glad that you asked the question. At one time, Apollo was an empire scattered over different locations with numerous departments, each of which was an island of excellence with isolated systems. As soon as I took over as the COO of the company, I made the crucial decision to put in place a strong IT backup for Apollo. Once the decision was taken, we scouted for the best firms to cater to our requirements in the fastest possible time. Thus we zeroed in on SAP. And, IBM was chosen as the implementation partner.

Within a record seven months, everything was in place, and today, we are 110% IT savvy. The IT base we created is one of the best, and it has paid us rich dividends in terms of operational cost, time saving, inventory and efficiency. I foresee a smarter use of IT enabling me to talk even to my machines. Today, it is only to my customers and salesforce, but I need to know which machine is giving me optimum results because that’s cost to me.

Q: What is your advice to the young generation?

Kanwar: This is the age of innovation. Innovation will never happen single-handedly. There is need for more interaction and collaboration among universities, the student community, faculty and industry. We have embarked upon some such tie-ups with reputed universities abroad with a view to coming up with the right technological solutions. New materials and processes have to be developed. Nanotechnology is a highly promising area, and we are exploring it quite seriously.