The Hindu Business Line : Apollo Tyres hikes truck, bus tyre prices

FACED with increased cost-push on the raw material front, especially that of natural rubber, the Rs 2,300-crore Apollo Tyres Ltd (ATL) has increased the prices of its truck and bus tyres by about 2 per cent to 3 per cent. The latest increase in this category is the first for the company in the current fiscal.

The company had last increased the prices of its commercial truck and bus tyres in January 2004, when the prices were increased by up to 3 per cent.

ATL had last week increased the prices of its entire non-truck tyre range by average 2.5 per cent.

During fiscal 2003-04, natural rubber prices saw an increase of around 30 per cent due to the demand-supply imbalances in the domestic market aided by high international prices. Exports of natural rubber from India increased by 35 per cent to around 70,000 tonnes during 2003-04, resulting in low domestic stocks.

The domestic tyre industry has been urging the Government to remove "export subsidy" on natural rubber and highlighting that there is all likelihood of some companies turning sick in the industry.

"It is a patently inequitable situation that China is able to buy Indian rubber cheaper than Indian companies, because of the export subsidy, and then use that rubber to manufacture tyres that are then imported into India under concessional duty because of bilateral trade treaties," Mr Onkar S. Kanwar, Chairman, ATL, said in his recent letter (forming part of the annual report for 2003-04) to the company's shareholders.