Apollo Tyres Ltd is looking to strengthen presence in some of its existing markets and grow operations in ASEAN and North America as a part of its exports strategy. Exports, currently account for nearly 17-18 per cent of its turnover, as against a share of around 7-8 per centthree years back. The company’s standalone revenues stood at ₹14,649 crore in FY-22.
According to Satish Sharma, President (APMEA) and wholetime director, Apollo Tyres, the company has gone in for exports in a strategic sense and has developed portfolio for countries such as Europe and ASEAN.
“Exports have grown to close to 17-18 per cent of our turnover from around 7-8 per cent three years ago. So we have grown in a significant way in a span of three years. We hope to be in secular organic growth and we are bullish on export strategy,” Sharma told businessline during a recent visit to Guwahati to see a rubber plantation project in the northeast organized by ATMA (Automotive Tyre Manufacturers’ Association).
Strengthening Europe presence
Apollo Tyres witnessed a growth of 18 per cent in its Europe business during FY-22 and the region crossed an important milestone of EUR 100 million mark as EBIDTA during the year. This is the highest ever EBITDA for the European operations over the last 13 years, according to information available in the latest annual report (2021-22).
Apollo Tyres expects volume growth to bounce back to pre-pandemic levelsApollo Tyres expects volume growth to be good during H2 FY23
The company is powered by well-established product brands in its key markets – Apollo and Vredestein.
“Our focus on the Europe region with our premiumisation strategy necessitated the specialisation process which entailed focus on profitable products like agricultural tyres and high value - niche segment passenger car tyres. It is heartening to note that this strategy has brought in results,” the report said.
The company is aggressively pursuing its strategy of building OEM relationships in Europe and has seen key wins.
“Apollo Tyres has started deliveries to European OEM manufacturers endorsing the premium position of its Vredestein brand. This will help to generate replacement demand. With the premium positioning of the Vredestein brand in Europe and now with the modern plant in Hungary, the company has good prospects for improving its product mix towards a more profitable premium car tyre segment,” it said.
The company has launched truck tyres in Europe, which will further enhance revenue and market presence. Anti-dumping measures in EU against Chinese imports will support the expansion of Apollo’s truck tyre footprint.
In Europe, the company largely operates in the replacement market in PV, agriculture, industrial, truck and bicycle segments, even as it continues to make inroads into the OEM segment in PV and agriculture.
Focus on new geographies
The company has entered the CV tyre segment in North America, after a successful launch of its passenger vehicle range in this market.
“US is our big foray, it is a big move. It is still a small market but we expect it to grow to $300 million by 2026 and we are focusing on that,” Sharma said.
The company would continue to increase its focus on new geographies such as North America and in geographies where it has already made some inroads, such as in the ASEAN and the Middle East. These geographies will be the growth avenues for the future.
The company continues to invest in brand building, working on the requirements of APMEA region and bring in country-specific products.