‘Demonetisation, GST has impacted industry’

JK Tyre & Industries Ltd’s first region effects were reflective of the troubles confronted by way of the tire enterprise — a hard commercial enterprise environment, compounded with the aid of unexpected trends at the coverage front and persevered dumping of reasonably-priced Chinese tires. However, JK Tyre is positive about its companies not simplest in India, but also the world over, CMD Raghupati Singhania advised BusinessLine in an interview. Excerpts:

The closing 3 quarters have not been appropriate for JK Tyre. What do you think are the reasons?

Demonetisation

The yr has been the excellent, with each possibility and demanding situations on several fronts. Demonetisation, the GST rollout and a steep upward thrust in raw material prices had some impact on the industry. However, JK Tyre has weathered the turbulence properly. It is real that during this time, the organization pronounced unmarried-digit extent boom, revenues were enormously flat and there was a few decline in our bottom line. However, strategic making plans and a persistent approach ensured that we maintained our role as a marketplace chief inside the truck/bus radial segment. With the smoothening of GST troubles, the enterprise will register high-quality boom and we’re positive of an excellent show.

What’s your cross-to marketplace method to hold an increase in the modern state of affairs?

To maintain growth inside the truck/bus radial tire section, we released a multi-level product and logo method. While ‘JK Tyre’ persevered to cater to the top class segment, the ‘Vikrant’ brand became leveraged to fulfill the requirements of the midsection. A new logo ‘Challenger’ was released inside the price phase of truck/bus tires. With this, we have got a whole range for each purchase phase. Going past sales, these days we provide entire cradle-to-grave solutions for truck/bus radials.

How has JK Tyre managed its international presence after the acquisition of JK Tornel in 2008?

GST

JK Tyre has efficaciously built a global presence — including West Asia, Africa, South-East Asia and Australia. While we also supply tires to the American markets, the purchase of Tornel in Mexico in 2008 paved the way for increasing our international footprint in Mexico, Latin America, and the USA. Deeper get admission to into the American markets making use of NAFTA and different regional exchange blocks out of Mexico has enabled the company to sign in a sizeable growth in the vicinity.

How can the authorities provide an impetus to the enterprise?

The authorities have introduced an allocation of nearly ₹4 lakh crore for infrastructure improvement. More specifically, an allocation for the construction and maintenance of national highways was extended to ₹sixty four,000 crore. This, coupled with coverage measures to facilitate faster street production, will support the road delivery infrastructure. This, in turn, will beautify the offtake of all varieties of tires. In a brief time, GST is showing symptoms of facilitating motion of products across u . S . A . In a unified marketplace. As the marketplace evolves, there may be possibilities to enhance efficiencies inside the supply chain, thereby reducing the cost of operations. This will generate OEM demand for passenger automobile and two-wheeler tires specifically, in order to enhance the substitute tire marketplace.

You have been a prominent voice in opposition to the dumping of Chinese tires. How bad is the state of affairs?

This is not only approximately imports from China but also different Asian nations with whom India has loose change agreements (FTAs). This difficulty is more glaring within the Indian tire enterprise, wherein almost eighty according to cent of imports are at concessional duties, eroding a huge part of the market for the home industry that has already undertaken huge-scale ability additions with large investments of nearly ₹45,000 crore in the beyond few years. To make matters worse, natural rubber, the maximum critical raw cloth for tires, need to be imported because of domestic non-availability but is included in the bad list with the same FTA companions. Therefore, the finished product enters the Indian marketplace under a concessional duty, while the raw material is not eligible for any concession in custom obligation — a conventional case of inverted responsibility structure. In reality, the tire enterprise is one of the few ultimate ones which can be the problem to inverted obligations, a subversion we had been asking the government to accurate.

What is the ability of your plants right now?

We have 12 manufacturing vegetation — nine in India, placed at Jaykaygram (Rajasthan), Banmore (Madhya Pradesh), Chennai, 3 flowers in Mysuru and 3 in Laksar (Uttarakhand), and the balance three plants in Mexico. Our general capacity is 33 million tires in keeping with annum.

As opposition rises in radial and tubeless tires for passenger motors from overseas players, what is going to be your USP?

industry

JK Tyre’s persisted emphasis on growing products using modern technology has helped it stay beforehand within the aggressive tire marketplace. Our focus on innovation and R&D has helped us reap advanced product high-quality, better manufacturing efficiency and lower expenses, that have translated into better patron satisfaction. Our ‘Blaze’ variety of -Wheeler tires is specific — it’s far the best hybrid tire in India that can be used each for tubeless and tube type applications.

Are you searching GST out more acquisitions Demonetisation industry globally?

We have hooked up marketing hubs within the US as additionally in one of the kind elements of the sector together with the UAE, Thailand, South Africa, Indonesia, and Brazil, aside from exploring different places. We are open to an opportunity for the tire.

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