RPG Group heir Anant Goenka, who is deputy MD of the group’s flagship company, Ceat, is looking to turn around the fortunes of India’s fourth-largest tyre-maker.
He is focusing on profitability (read margins) and exports to revive the company. The idea is to change the product mix – to make more tyres for passenger cars, utility vehicle and two-wheeler – and to identify export destinations with high growth potential in Asia, Africa and Latin America.
“Currently about 60% of our production is truck cross-ply tyres and it is a very price elastic segment where margins are low. We are trying to move towards brand conscious segments,” Goenka told Hindustan Times. “We are in the process of identifying key markets in various geographies and charting out long term growth strategies in those regions,” he said, identifying several regions.
Brazil and Bolivia in Latin America, Cameroon, Nigeria and Ghana in Africa and Malaysia and Indonesia in Asia show promise, he feels.
Export to 100 countries account for 20% of Ceat’s total revenues. Acquisition of the Ceat brand name in Europe has boosted the export of off-road tyres there.
Huge cost of rubber and high interest payouts pulled Ceat’s bottomline 63% down to R5.6 crore while net sales grew 33% to R1,100 crore in the last quarter. “Growth has been 20% per annum for the last three years. But the profitability has been a challenge,” Goenka said.
Anant is betting big on the newly-built R650-crore Halol radial tyre plant, which can make 300,000 passenger car and 40,000 truck tyres a month.
“The company will start making profit when we produce 90 tonnes a day. We will achieve full ramp up, that is 150 tonnes a day, in the next few months,” he said.