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Having opened a new export market in Indonesia earlier this year, Apollo Tyres Ltd is now planning to set up a full-fledged sales and service outfit in Jakarta, tentatively in the first quarter of the next fiscal.
Early indications suggest that the company may roll out its Indonesian subsidiary to boost Indian exports in the archipelago. The Indian tyre major is also planning export of truck-bus radials to Australia.
Apollo is primarily targeting the truck-bus and cross-ply OTR (off-the-road) tyres market in the South-East Asian nation. Indonesia — with large mining operations, cheap fuel and sustained economic growth at 6-7 per cent — offers wide opportunities for tyre makers.
The geographical proximity — resulting into lower freight considerations — as well as a higher price realisation potential adds to the viability of Apollo's export plans to Indonesia.
“We have already appointed representatives to boost sales in Indonesia. Plans are under consideration to open sales office in the country tentatively by the first quarter of 2012-13,” Mr Satish Sharma, Chief, India operations, told Business Line .
The company is currently exporting limited numbers of truck-bus and OTR tyres in the archipelago.
Dubai Hub model
While details of the proposed Indonesian outfit have yet to be firmed up, Mr Sharma indicated that the organisational set up in Indonesia would be “similar” to its sales hub in Dubai. The recently incorporated Apollo Tyre Middle East (ATME) Ltd offers a complete range of sales and service solutions to West Asian economies.
“This is a competitive market. However, having dome business in Europe, we are confident of the value proposition of our product portfolio,” the company official said.
According to him, apart from the radial market, Indonesia also offers wide opportunities in the cross-ply (or BIAS) tyres for truck-bus segment. “Similar to India, nearly 80 per cent of the commercial vehicles run on cross-ply tyres in Indonesia,” Mr. Sharma said.
On Australian plans, the official said that the company was yet to firm up its strategies for the highly developed Australian market and the exports were likely to commence in the next fiscal.
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