Apollo chairman talks growth, COVID vigilance

GURUGRAM, India — Apollo Tyres Ltd. Chairman Onkar S. Kanwar brought a message of strength, growth and a call for continued vigilance against COVID-19 during his address at Apollo's 48th annual general meeting.

"We continue with our belief that no challenge is so tough that it cannot be overcome or converted into opportunity," Mr. Kanwar said in a speech July 23.

Mr. Kanwar encouraged employees and their families to continue to stay safe amid the COVID-19 pandemic and offered condolences to those who lost loved ones during the first and second waves of the pandemic in India.

"As many of you are aware, after the deadly second wave in India, there is a talk of the third wave. I would strongly recommend all members and their families to get vaccinated. The vaccines offer a fighting chance against the virus," he said.

"Despite the uncertainty of the third wave, I remain bullish on the strength of the Indian and global economies. Your company is a dynamic company and has been mapping possible scenarios for the coming months and already drawn action plans accordingly."

Pandemic

Mr. Kanwar said the pandemic brought disruption of the business and everyday life.

"As a global company with plants in three countries and employees in many more, it was a challenging time for us as we had to understand multiple scenarios," he said. "The situation was different in each country and also kept changing fast. We could not have a uniform approach and had to learn quickly to live with the added complexity. I think the first and foremost focus of the leadership was to ensure the safety of all our Apollo Family members who were working in the plants, at offices and from home."

Apollo, he said, created an "entire eco-system" to keep employees safe at the plants and working remotely and continuing business as usual. Despite adjusting, demand dropped sharply across the globe for parts of 2020, and that has been felt in 2021.

"We have always spoken about profitable growth and yet the impact of the pandemic on the economy and our business was such that for the first time in over two decades, we announced a net loss in the first quarter of the financial year," he said.

The pandemic forced the company to define "good cost" to trim expenses to maintain investment in research and development and marketing.

"It is my firm belief that we need to drive unnecessary cost out of our business, as that is the delta between a profitable and a losing organization in this increasingly global industry."

Growth

Mr. Kanwar said the company's previous investment into a greenfield plant in Chennai was timed in a way Apollo got a lead on the competition in India by 18 months.

"Similarly, even during the pandemic, our strategy of future-proofing the company helped us to commission our seventh manufacturing unit globally, and the fifth in India, in Andhra Pradesh. We also inaugurated our two-wheeler radial tire facility in Gujarat as we set our eyes on building a leadership position in highly profitable premium two-wheeler market," he said.

The company expanded its product line and dealer network with a focus on virtual and digital tools.

"Apollo virtually launched the new identity of our product brand Vredestein and this will allow us to position the brand, which has a legacy of over 110 years, as an even more premium brand and take our marketing activities to the next level," he said.

This year, Apollo launched the Vredestein brand product portfolio for the North American market. He said "the response has been extremely good and we hope to make a mark with our products in the next few years."

In India, Apollo also launched what it claims as an first in the industry – a compact SUV tire, Apterra Cross.

"All these initiatives helped us to bounce back, gain market leadership in various segments and helped us end the fiscal on a healthy note with robust revenue growth across market segments and geographies," he said.

Looking ahead

Apollo has focused on a community initiative, "Taking Responsibility," where employees help distribute food and other resources to people across the country. Mr. Kanwar said this initiative will grow in the communities the company serves.

Mr. Kanwar also touched on sustainability, saying responsible production is key to the future.

"If a company only focuses on profits and growth, it is unlikely to create a long lasting institution and leave a legacy for our children," he said. "For us the belief comes from within, that without giving back to society no business can be truly successful and sustainable in the long run. It is for this reason that sustainability is at the core of your company."

Mr. Kanwar said he is excited for the future of the company, noting the company has taken on an ambitious target of reaching $5 billion by 2025-26.

"Your support is highly valued and your company's success is an indication of the faith you have always bestowed upon us," Mr. Kanwar told employees. "The support that we continue to receive from our banks, financial institutions and the governments wherever we operate, enable us to plan for the future. With all this we shall continue to grow together as Apollo One Family."