On July 5, Apollo Tyres Ltd.'s Onkar S. Kanwar gave the Chairman's Speech at the company's 44th Annual General Meeting. Presented to attendees in Kochi, Kerala, India, the speech focused on Vision 2020, and revealed a little about what Apollo is doing in the American market.
Here is a transcript of Kanwar's speech, with minor editing for clarity.
The year 2016-17 was one of the most uncertain ones I can recall. There was the huge surprise of Brexit, the sudden demonetisation (in India) and the results of the U.S. presidential election, all making it one of the most unpredictable years we have encountered.
However, for your company, the year will be remembered as a watershed year. I am proud to share with you few steps taken by your company to shake off the shackles of the past and move into a new orbit. For your company, the year began with a simple agenda -- to set forth the goal for the years ahead, taking into account the ongoing and future turbulence. I am glad to share your company’s Vision 2020, "To be a premier tire company with a diversified and multinational presence."
I am confident that this will serve as a guiding light for each one of us. In line with realizing the Vision 2020, your company has set its sight on achieving key objectives for the years ahead. These include "building leadership in India," "premiumization in Europe" and "‘explore strategically attractive markets where we are currently not represented." Your company’s actions during the previous year and over the next few years will be dictated by these key objectives.
As part of premiumization strategy, your company had decided to set up its first greenfield plant outside India... in Hungary. As you are aware, because of the demand for the company’s best-in-class products, we have been seeing high capacity utilization in our plant in the Netherlands even as our customers have been demanding higher quantities. Europe is one of the key markets for us and it is important to ensure a consistent supply to the market.
I am proud to say that, once again, your company has displayed excellent project management skills and have delivered the greenfield project in a short span of two years. In April 2017, the honorable Prime Minister of Hungary along with the senior management of your company inaugurated the commercial production of the plant. Together with a highly visible premium brand like Vredestein and the Apollo brand positioned to cater to the mass market, a larger product portfolio from the Hungary plant, I believe your company is ready to accelerate its growth in the European market. This strategy will also insulate your company from market cycles and short-term product challenges.
Beyond Europe, our focus on India continues. We remain determined to strengthen our home base, and your company will continue to invest in its various plants in the country for capacity expansion and technological upgradation. We see our investments as part of the over-arching strategy to "build leadership in India." We have already completed the Phase 1 of the Truck/Bus radial expansion in the Chennai plant. We have also announced plans to set up our fifth Indian manufacturing plant in state of Andhra Pradesh to create capacities for the two-wheeler tire and other emerging product categories. I have been informing you about the challenges to your company’s plants in Kerala due to the increasing low-cost imports from China. The imports of low-cost radials for truck and bus is proving to be a challenge for our bias products manufactured in our Kerala plants. This is a big issue as we saw a unit closing down because of these low-cost imports. However, you are aware of your company’s "go the distance" philosophy, and we have put in place a strategy of expanding our bias product portfolio for the other segments like mining, agriculture, etc.... and building a leadership position in these segments.
To achieve the third objective of "exploring strategically attractive markets where we are currently not represented," we will continue to use our capabilities in R&D and marketing. At the end of the fiscal, your company launched its best-in-class and globally benchmarked truck bus radial tires in Europe. The R&D team, along with other teams, has been working for over five years developing the products and extensively testing over 250 million kilometers across six European countries to ensure that we can offer the best product to the consumers. Hand-in-hand, the marketing team decided on an innovative approach of selling the products online and directly to the consumers, a new approach in the market. We are confident that this approach will help us gain market share despite the late entry into the European market. Like Europe, your company continues to work on products for the American market and other markets including ASEAN and Middle East to ensure that our products are available in various countries. We understand that the requirements for each market is different, and hence the teams have a tough task of understanding the markets needs, designing a product to suit the market and then testing it.
Despite such challenges, last year saw specific products introduced for markets including Malaysia, Thailand, Europe and India. We have seen success in adopting such a strategy. I am proud to mention that few products launched earlier are now market leaders in their categories. For instance, your company’s product Apollo Amazer 4G Life, which runs up to 100,000 km, is a market leader in its category in India.
Your company’s aspiration goes beyond just market leadership. I have always believed in creating a responsible organization in pursuit of sustainable growth and profits. I have always emphasized that sustainability is at the core of your company. "Care for Society," part of the Apollo Way, is one of the key values, which ensures that each employee behaves and acts in a socially responsible manner. We believe that our CSR activities revolve around Involving, Influencing and Impacting the key stakeholders and ensuring it is a win-win situation for us and our stakeholders.
I am proud to mention that your company continues to be felicitated with prestigious awards for the work being done by CSR Team. Such recognitions reinforce our vision and philosophy guiding our CSR work. Kerala has always been very close to me and your company, and hence many of our initiatives are made for Kerala. Last year, your company launched a Mangrove conservation project in Kannur district, one of the largest mangrove villages of Kerala. Further, our projects for the under-privileged women to earn livelihood has been showing significant results in Kerala, with more women getting self-reliant.
The year ahead will be challenging as it will be uncertain. Such challenges and uncertainty have not stopped us in the past... it will not do now. Your company will continue to invest heavily and write its own destiny as it walks down the path of achieving its Vision -- "To be a Premier tire company with a diversified and multinational presence."
I would like to conclude by thanking each one of you for having been a partner in this ongoing journey. The support that we continue to receive from our banks, financial institutions and the various state governments we operate in, as also national governments in various countries, enable us to plan for the future. Thank you.