First Indian company to achieve feat
How does one top a gargantuan achievement like touching the 10 million mark? By doubling it. A seasoned businessman like Dr. Raghupati Singhania has all the reason to laugh in a light-hearted manner at the conjecture, yet offers a practical answer: “Touching the first 10 million was a Herculean task because JK Tyre introduced radials in India. Radials, in India, will achieve 50:50 share by next year. With rapid radialization, I am sure our next 20 will come faster.”
We caught up with Dr. Singhania, CMD of JK Tyre & Industries Ltd., at JK Tyre’s milestone achievement of rolling out its 10 millionth tyre at its Mysore plant. By 2020, Dr. Singhania hopes to “become a three billion dollar company’ from the current 1.4 billion dollar. He shares the trajectory the company will take to achieve this goal. “This growth will come from organic, inorganic, brown and green field sectors from both national and international arenas.”
Nurturing the market
It never was easy – whether in the past when it introduced radials or now when it wants to create firmer footprints abroad. Ask him, and Dr. Singhania will vouch for the tough job of nurturing customers involved: “Nobody knows us abroad. Though we are exporting to 90 countries around the world, we are very small in those markets.”
Reminiscing, he said the company has come a long way. “I still remember the early days when truckers would ask – What kind of a tyre is this which has steel in it? Why is there a hook in a tyre? How do you say that this will give a smooth ride? And we would explain the benefits of radial tyres. The radialization curve was slow then, and now is the point when it is rising.”
Home front
The market closer home is riddled with challenges. Though the demand for radial tyres is on the rise, the industry is suffused with supremacy from China. Dr. Singhania acknowledged: “The Chinese have created dominance the world over in tyre business. They have almost 40-50 per cent market share everywhere. But China has been blatantly dumping at lower prices of 20-30 per cent and the raw material prices are the same globally by and large. We have assimilated the data and submitted to the Government that China is selling below the cost and yet we are unable to impose any anti-dumping duties in the country. My concern is that we are taking far too long a time in taking the step.”
The second challenge that Dr. Singhania discussed was technology and how companies worldwide are investing hugely in it. He shared: “These international companies are investing about four per cent of their revenues translating into billions of dollars per year. We are also investing substantially in our R&D.”
A sound decision, especially in the scenario that the majority of industry has been taken over by youngsters conducting business who have grown up in a tech-savvy environment.
Dr. Singhania is for encouragement of innovative start-ups where, according to him, “we can help ourselves with their innovation and we apply it in our business, and we are witnessing the changes, perhaps, even skip a generation and we will take a quantum leap in ideas.”
The third challenge presents itself in the shape of producing low cost product with high performance, which in reality is an age-old struggle. He said: “Yes, but the challenge has taken a different turn in complexities with the introduction of nano materials. We also have deployed it in our businesses, which has opened up more opportunities and therefore more challenges in terms of achievements.”
New products with advanced technology have yet again the potential to take JK Tyre back to the problem of nurturing their customers. Agreed Dr. Singhania: “True. Now reaching out to the customer and servicing him must be done in an extremely innovative way because that is going to be the sole differentiator.”
A unique marketing methodology – Tyres by Mileage – has helped JK Tyre secure its customer and his long-term loyalty. Dr. Singhania shared: “He pays when he uses it. Large fleets are paying as they use every month as per the kilometers. It means driving value, and we are offering a value proposition. Then we have something called Fleet Service. Each fleet is of 400-500 vehicles and we have deputed our people who are dedicatedly delivering value servicing to them and teaching them small tricks to derive more mileage or do rotation repairs. Then there is the Dial-a-Tyre service wherein if you have a punctured tyre in a deserted place at an odd time, then we can fix you the tyre or even give you a replacement if need be.”
Dr. Singhania believes in ‘inclusive growth’ which, according to him, includes “balancing people deployment, technology, green environment, people welfare, saving water resources, reducing air pollution and enhancing sustainability”. But achieving this poses another important challenge to overcome. And a solution, readily for him, is available in being open minded.
The fourth and biggest challenge for Dr. Singhania is skill development which he termed as, ‘extremely difficult’.
He proudly talked about the ‘new generation plant’ in Chennai. “When we were setting it up, we started training our workmen who were going to operate the plant, from one year before. Luckily, we had the opportunity because we were running another radial plant here so that’s how we created skill. And they are not workmen, but we call them technicians here.”
He quoted an interesting example of how his technicians surpassed his expectations in delivering superb workmanship: “We thought we would need six months to ramp up production from zero to 100 with the newly installed three hi-tech machines in our new plant, but I was surprised that within six weeks we had attained 100 per cent production on one machine. Tyre building is one of the most critical operations and that’s why we train our people every week.”
Global footprint
Creating market abroad is now being pursued on a war footing within JK Tyre. Mr. Arun K. Bajoria, Director & President – International Operations, shared: “Our development plans include increasing exports, specifically to the US. We have done away with our capacity restraints by acquiring a new company in Uttarakhand near Haridwar. We have expanded our Mexican facility by more than 50 per cent, especially in the passenger car radials. Now we have more than 15,000 passenger car radials being manufactured every day as against the earlier 10,000.”
Dr. Singhania added: “It is heartening to see that in countries as far away as Peru, Uruguay and Paraguay, we have our branding and our colours being promoted. I feel proud being an Indian company. Marketshare will come gradually.”
As one of the top 25 companies in the world in terms of volumes, value and quality, JK Tyre takes pride in having ‘beaten’ Michelin in India who, according to Dr. Singhania, was ‘underselling JK Tyre’.
And as one of the best five companies in the world in water and energy consumption, JK Tyre is all agog to take on the world.