Tyre major MRF has said the company is looking at developing raw materials jointly with domestic players, in a bid to cut the dependence on imports. As part of the import substitution initiative, the company is working on developing raw materials such as sulphur, butyl rubber, microcrystalline wax, and tackifier resin, among others, jointly with the domestic sources.
KM Mammen, chairman & MD, MRF, writing in the company’s Annual Report 2021, informed that to further improve the environmental friendly nature of the tyres, the company has made some changes in the raw materials mix, for two wheeler and passenger car tyres.
“To improve sustainability of tyre industry, the company is working on the multi-pronged ‘4R’ strategy, that is to reduce (reduction in CO2 emission by developing low RR tyres), recycle (recycle materials from end-of-life tyres as raw materials for new tyres), reuse (by promoting multiple re-treaded tyres) and renewable (promoting critical tyre raw materials from environmentally sustainable sources such as biomass and waste materials),” he said.
The company, on the outlook, said MRF’s key markets of West Asia & African regions, along with Philippines, Indonesia and Bangladesh continued to have sustained demand for its products across categories. The demand for tyres in the truck radial light truck and motorcycle categories continued to grow. reflecting the strong brand equity the company has in these markets.
It is expected that despite the current unstable pandemic scenario across many global markets, the coming year should continue to see good demand for the company’s products across all categories.
On the domestic front, however, in view of the second wave of Covid-19 and the subsequent lockdowns imposed by various state governments in the first quarter of financial year 2021-2022, the business is expected to be affected in the short term.
It said the prospects for the automobile industry has been impacted by the Covid second wave, when things started looking better. The impact in rural areas also seem to be more in the second wave, particularly affecting the two wheeler demand. Component shortages including key components like semi conductors will also impact in the near term.
MRF said, however, pent up demand might come to the aid of the industry from second quarter like in the last year, particularly in the passenger segment which currently is sitting on order backlogs.
The voluntary vehicle scrapping policy could potentially provide a big boost to the automobile industry in the long term. But in the near term, besides growth of the economy, the fortunes of the automobile industry is linked to a rise in employment and income levels, considering that entry level models have suffered cost increase, it said.
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