The Hindu Business Line : TI Cycles looks at semi-urban, rural markets for growth

TI Cycles, a unit of Tube Investments of India of the Murugappa group, plans to tap the semi-urban and rural markets to expand its market for cycles while focusing on the related fitness products in the urban centres, according to Mr A. Vellayan, Director (External Relations), Murugappa group.

The increase in steel price could not be passed on to the consumers in 2004-05, which affected the performance of Tube Investments.

Tube Investments contributed about 25 per cent of the group's Rs 6,250-crore turnover and 23 per cent of profitability.

The outlook for the current year is optimistic, with steel prices not expected to increase and the demand for cycles good in April.

Cycle World, the company's exclusive showrooms for cycles and fitness equipment, is doing well; the company plans to open 25 more such outlets in the near future, he said.

However, a problem in the urban centres is the lack of space. The company is focusing on health accessories in the urban centres while working on awareness building for need for separate cycle tracks and health benefits of cycling.

"Real growth would be from the standard models, which are in demand in the semi-urban and rural markets."

Following the agreement between Tube Investments and the Orissa Government in April for a steel project, the company is going ahead with the detailed project analysis.

Tube Investments will promote a separate company that will ultimately handle the project, Mr Vellayan said.

The group believes that there are good prospects in the steel industry, especially since per capita steel consumption in India is one-tenth that of China.

Every year the group consumes about 300,000 tonnes of steel.

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