KOCHI, India (Aug. 6, 2014) — Apollo Tyres Ltd. has put its failed takeover of Cooper Tire & Rubber Co. behind it and is pouring resources into “Plan B” — expanding capacities, product lines and sales territories to keep pace with customers’ and suppliers’ global growth, according to statements by Chairman Onkar Kanwar at the firm’s annual meeting this week.
‘The fact that the (Cooper) deal did not ‘fructify’ is not the real story,” Mr. Kanwar said. “The real story is that your company identified future challenges and was able to make the attempt to address these to ensure an increase in your long-term wealth.
“The real story is that as soon as we knew that Plan A was not working out, we launched Plan B, which also addresses the objectives we have identified,” he continued, noting that Apollo is committed to building a plant in Eastern Europe, expanding capacity at its Chennai, India, radial truck tire plant and revamp the product mix at its bias-ply truck tires Kalamassery, India, plant to specialty/industrial tires.
Mr. Kanwar did not address the issue of where in Eastern Europe Apollo plans to build its plant nor address the still-open issue of pending legal action against Cooper in the U.S. court system.
In addition, Apollo has opened sales offices in Dubai, Thailand and Brazil, leading the firm’s “thrust into new markets, building our brands and establishing distribution networks for a greatly enhanced consumer experience,” Mr. Kanwar said.
Addressing the global macroeconomic scene, Mr. Kanwar said he sees a “further churn taking place,” with the U.S. enjoying a resurgence in manufacturing, China undergoing consolidation and Europe remaining a “very significant market” although rapid growth is not in the cards there.
As for Apollo’s home market, “India is today at the cusp of a golden era,” he predicted. “There is much hope and optimism that we are about to see the unleashing of our potential and finally take our rightful place in the global economy.
“The path ahead is not easy, but the prize itself is worth striving for. I am extremely confident that we will once again go back to the years of sustained high growth in India.”
Mr. Kanwar called the 2013-14 period “watershed years” for both India and Apollo, which took “bold and decisive steps” to shake off the shackles of the past.
“Your company too decided to shape its own destiny, rather than remain hostage to the vagaries of the markets, business cycles and raw material costs,” Mr. Kanwar told meeting attendees.
“We realized that operations on a global scale give us the leverage to manage increasingly consolidated customers on the one hand, and ever-larger suppliers on the other. Our confidence in our team and faith in you, our shareholders, emboldened us to put our strategy into action and attempt to acquire a company larger than us.”
Although the “strategic fit was perfect,” that strategy — Plan A — failed for many, well-documented reasons, the executive said.
“The next phase of your company’s journey has just begun,” Mr. Kanwar concluded.
“Challenges are part of our lives; it is the opportunities that we need to focus on. I am optimistic and have equal faith in the future and the power of hard work which ensures that even as we work to create value for ourselves, even greater value is generated for the society that we live in.”
How have tire prices been in the last few months?
|They've gone up 1-5%||
|They've increased 6-10%||
|They've stayed flat||
|They've gone down between 1 and 5%||
|They've gone down 6-10%||
|They've dropped more than 10%||