Given the changes the domestic tyre industry is witnessing in terms of radialisation, JK Tyre has recently started a research & development facility in Mysuru, Karnataka.
By Kritika Arora
Given the changes the domestic tyre industry is witnessing in terms of radialisation, JK Tyre has recently started a research & development facility in Mysuru, Karnataka. Rajiv Prasad, president (India operations), JK Tyre, told FE’s Kritika Arora that the facility will help the company’s overall operations and bring down production time of the rollout of a new tyre in a more efficient manner. Excerpts:
What is JK Tyre’s current market share?
JK Tyre is a leader in the Truck Bus Radial (TBR) tyre segment and we aim to strengthen our existing product base by making significant investments in research and development for superior grade products in the two-wheeler, three-wheeler and off-the-road tyre categories. The expansion of truck/bus radial capacity undertaken at our Cavendish plant will further strengthen our leadership in this segment. We are excited at the growth of the passenger car industry and are well prepared to keep pace with opportunities arising therefrom. The two/three-wheeler segment is also growing and we are excited at our enhanced presence in this segment.
The passenger vehicle (PV) tyre segment is performing well, we have registered a growth of more than 30% till year to date (YTD) September 2018. A sustained multi-pronged strategy focused on amplifying the brand, widening retail reach and enhancing customer connect throughout the year in the segment helped us strengthen our numbers.
Despite external challenges and headwinds in FY2017-18, JK Tyre improved its sales volume by recording an impressive 11% growth, which was higher than the industry at large.
Coming to our capacity, we hope to register 100% output with 85% capacity utilisation in the TBR segment and 94%- 95% capacity utilisation in 2/3-wheeler segment, respectively.
JK Tyre has recently opened a new R&D centre at Mysore. How much has the company invested and will the centre focus on any new technologies that can have an impact on the industry? Will it impact the radialisation the company currently has? What is the percentage the company expects to achieve through this R&D centre?
The Raghupati Singhania Centre of Excellence (RPSCOE) Centre in Mysore is the next generation of tyre technology in that it has the best scientists, engineers and technicians in the industry who will work on optimising product performance and product design cycle time through simulation and predictive techniques. We have invested enormous resources in the Centre and it will play an instrumental role in shaping technology, disruption, innovation, research and development at JK Tyre. RPSCOE is our hub for a focused research on multiple aspects of tyre technology, including developing advanced laboratory predictors for tyre performance and providing key inputs for life prediction of rubber products. We have made around Rs 200 crore investment to bring the state-of-art centre in Mysore.
Research at the Centre will be on material and compound development, future technology, computational mechanics and tyre characterisation. One of the special features of the Centre, the Semi-Anechoic Chamber, is a first in the Indian tyre industry. It uses specialised software for noise vibration and harshness data analysis. It will not only help us attain the numbers but more importantly, manufacture global-level tyre products, which are fit for future and at the same time, in line with our mission to be a ‘customer-obsessed’ company.
Radialisation is expected to go up to 50% in 2018-19. Do you have a target for further radialisation?
JK Tyre led the radial revolution in the country back in 1977 when no one else was even talking about it in the industry. It took a lot of research and hard work to make Radial tyres for an entire range of vehicles from truck/bus, LCV, passenger cars, MUV to tractor tyres, which eventually made us the market leaders in the radial space in India. More than a technology, radialisation has become a requirement for the automotive industry and customers, as radialisation helps in saving fuel costs, boosting mileage, reducing emission of harmful greenhouse gases and ensures a longer life for tyres. We pride ourselves for being pioneers in technology across segments, be it the introduction of radial tyre technology in the country or becoming the first company to produce 10 million truck/bus radial tyres. We aim to consolidate this market share in other segments.
By how much will domestic sales and exports go up due to radialisation?
Radialisation adds value to the customer and broadly substitutes BIAS Tyres, so it is volume neutral.
How much higher are the ebitda margins from radial tyres?
Ebitda margins are neutral in radial as bias capacity so depreciated whereas radial capacity has larger depreciated and has interest burden.