Apollo hits back at Kanwar's brother

Onkar S Kanwar is no stranger to controversy. In the early 1990s, he had an open spat with his father, Raunaq Singh, over who should control Apollo Tyres. He won finally, but not before a lot of dirty linen had been washed in public.

Last week, his brother, Narinder Jeet Kanwar, moved the Company Law Board in Chennai charging Kanwar of mismanaging the company.

Kanwar refuses to talk on the case as the matter is in the courts. The charge of mismanagement seems to have stung the family. The company's performance, it says, has been second to none.

"We are among the top ten tyre companies in the world in terms of profitability," says Neeraj R S Kanwar, joint managing director and COO of Apollo Tyres and Onkar Kanwar's son.

The company's EBITDA (earning before interest, tax, depreciation and amortisation) was 12.7 per cent for the quarter ended September 30, 2007 while its net margin was 5 per cent.

The company, according to Neeraj Kanwar, is India's largest tyre producer with facilities in India and South Africa, and ranks 14th in the world up from the 18th slot a year ago.

The company has a third of the commercial segment of the tyre market and a little less than a quarter of the passenger radial market, claims Kanwar, adding, "We are also the price leaders."

The company has done well in spite of the break up of its joint venture with Michelin two years ago. "We were supposed to put up a truck radial plant at Pune on the assumption that radialisation in this market would reach 10 per cent by 2005. However, it had reached only 2-3 per cent. So, we decided to part ways," says Neeraj Kanwar.

The issue of truck radial technology was resolved when Apollo Tyres acquired the Dunlop plant in South Africa for $52 million in April 2006.

Using this technology, the company has developed a new truck radial which will be launched in the country early next year.

At the moment, the company is selling truck radials under the Regal brand, which came with the South African acquisition. The new product will be sold under the flagship brand, Apollo.

On the anvil are new production plants and a new thrust on exports. "We want to enter Europe in a big way by tying up with some large car makers," Neeraj Kanwar says. Recently, the company has started focussing on export of value-added passenger car radials, though traditional cross-ply tyres still account for about half of its export volumes.

So, what is Narinder Jeet Kanwar complaining about? He could not be contacted for this article. Sources in the know of things said he used to run a company that supplied tubes to Apollo Tyres.

But he sold it some times back, after which Apollo set up its own tube-making facility in Pune.

Executives in the company said Narinder Jeet Kanwar held no shares in Apollo Tyres, which made his charges of mismanagement before CLB untenable.

While Neeraj Kanwar is charting the future of Apollo Tyres, his brother, Raja Kanwar, is looking after the group's trading arm, Apollo International, though he serves on the board of Apollo Tyres.

The family has also invested about Rs 185 crore in a 270-bed hospital called Artemis in Gurgaon. In Greek mythology, Artemis is the sister of Apollo.