An “Exciting Year”
The 34th Apollo Tyres Annual General Meeting, held in the Indian state of Kerala on July 26, was more than merely an occasion on which to report the company’s latest financial results. For chairman Onkar S Kanwar it was an opportunity to take stock of where the company has been and where it is headed. These thoughts were reflected in his address to company shareholders.
“The India we live in has changed dramatically over the last 34 years, he said in opening. “And especially so in the last ten. Today we stand at the threshold of great opportunity as a nation, for tomorrow will be India’s century.” He added that if India takes on the attitude of “being a winner”, as he believes Apollo has, the nation will continue to grow and “claim our rightful place in the pantheon of leading nations of the world.”
Kanwar added that this past year has been an exciting one for Apollo tyres. “Last year, I updated you on our mission to achieve a turnover of two billion US dollars by the year 2010….This year we have reached the half-way mark of a one billion dollar turnover, making your company the largest Indian tyre manufacturer by both value and volume. Having achieved the first billion in 30 years, we now propose to achieve the next one in just three. I am confident that with your continued support, we will not only achieve this, but also move beyond.
“It is a time for us to carefully study the lessons that we have learnt from the past few years and build on those, to service our shareholders and our customers more fruitfully.” To do so, said Kanwar, Apollo Tyres must think and act globally. “Your company’s vision is to be a leader in the Indian tyre industry and a significant global player. Last year, in keeping with this, we acquired Dunlop South Africa – a mere first step in your company’s global journey.”
Kanwar added, however, that achieving these goals would not come without effort. “As the world has become smaller, it has become more and more competitive. Today, your company not only competes with the best on the products it produces, but also in the hunt for the best talent, who can then set and achieve global standards in technology, production and marketing. These are our invisible new challenges in a truly global environment.”
The domestic market in India has undergone much change in the past decade, and Mr. Kanwar reflected on the path Apollo must take in order to continue moving forwards. “Every year brings with it unique challenges that your company has to tackle head on. In the present liberalised scenario, the options of petitioning governments or working through lobby groups no longer exist. Your company has to take its own independent steps to counter a range of issues. From constant price and supply volatility of raw materials to the rising danger of low-cost, unreliable products imported from neighbouring countries.”
Not specifically named but of particular to concern to Kanwar and Apollo is the influx of cheap Chinese tyres, some of indifferent quality, onto the Indian market. “If we can today access other markets, it is only fair to allow others to also operate in ours,” he commented. “However, just like India promises to take only our best to the global marketplace, it is only fair that products imported into India also adhere to standards of safety. Regrettably, many imported tyres do not. Sadly, a lower price point seems to have taken in, not only some of our regular customers, but also some of our most prestigious vehicle manufacturers. I do hope, in the long run, our Indian customers will choose product and service quality over a lower price.”
Despite this reference to perhaps the greatest threat facing the Indian tyre industry, the chairman’s speech remained upbeat, and he spoke of the measures Apollo was undertaking to benefit both the company’s own employees and the wider community. “I am happy to report to you that we have also stepped up our activity in the area of HIV-AIDS awareness and prevention. This year, we will be opening at least three more Apollo Tyres Health Care Clinics; are partnering with various state governments to take this forward through public-private partnerships; and have worked with the International Labour Organisation to ensure that each of our employees across offices and manufacturing units have the know-how to fight the spread of this deadly virus.” Apollo’s own healthcare venture, Artemis Health Sciences, is investing around £75 million in setting up hospitals and healthcare facilities throughout India. The first of these, in the city of Guragon, was scheduled to open in July.
Apollo’s involvement in Indian sport was also outlined. “As many of you are aware, Apollo has taken on the mantle of training and nurturing young talent in the sport of tennis,” said Kanwar. “Once again, we dared to dream big. We have set ourselves the challenge of Mission 2018. That in the next 10 years, your company’s tennis initiative should throw up a talent worthy to be a Wimbledon or a US Open or a French Open champion. It is not an easy proposition. But then, as shareholders, you have rarely expected anything less from us.”
In conclusion, the Apollo Tyres chairman stated: “Today we are on the point of transition from an organisation into an institution. I would like to thank each one of you for having been a partner in this exciting journey we have undertaken together. I believe together we can move to even greater heights.”