We are now getting a footprint across four continents: Neeraj Kanwar

Interview with Vice-Chairman & MD, Apollo Tyres

In the largest outbound deal in the Indian automobile industry so far, Apollo Tyres has acquired US-based Cooper Tire for $2.5 billion. Neeraj Kanwar, vice-chairman and managing director, tells Sharmistha Mukherjee the merger makes Apollo the seventh largest tyre company globally. Edited excerpts:

What synergies are you expecting?
In scale, geographies and brand & product mix. We will have access to more high-end technology for trucks in the Indian market. Post the completion of the acquisition, we can take Apollo brands to China, the largest for commercial vehicles. Cooper would be the third global brand in our portfolio. On the product side, we would be expanding our presence in the passenger car and sports utility vehicle (SUV) segments, which would complement our existing strength in truck and bus radials (TBRs). We will eventually introduce the Cooper brand in India. To begin with, we are considering interventions in the SUV category in the country.
 
You recently sold Dunlop to Sumitomo. What made you look at Cooper?

We owned the Dunlop brand only in 32 countries in Africa, so we thought best to exit and sell stake to the owner. In Cooper, we would have rights over all brands of the company globally. Apollo would have footprint across four continents, with 14 manufacturing facilities. Our production levels would more than double to 3,500 tonnes a day from 1,500 tonnes currently. We will also gain presence in the US and China markets. While the economy in the US is looking up significantly, China would offer us a low-cost manufacturing base.

About 65 per cent of your revenue comes from the Indian market. How would the mix change after the acquisition?
The proportion of India in our overall revenue will come down to 22 per cent from the present 65 per cent after the acquisition. China will contribute around 18 per cent and Europe around 12 per cent. The United States would pitch in about 43 per cent. Emerging markets such as Indian and China will be an important part of our revenue mix.
In India, we will continue to consolidate our leadership across segments. We have 31-32 market share in TBRs, 18-19 per cent share in passenger car tyres, 24-25 per cent in the market for light truck tyres and about 20 per cent in agri tyres. We will continue to expand our presence in these and other categories by bringing in brands from the Cooper portfolio, depending on market needs.