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K.R. Srivats

NEW DELHI, March 26

APOLLO Tyres Ltd (ATL) is looking at Russia as a new alternative source for supply of synthetic rubber, according to Mr Neeraj R.S. Kanwar, Chief Operating Officer.

"We have been constantly looking at other cheaper sources for supply of synthetic rubber. We are looking at Russia in this regard. We have been sourcing nylon tyre cord fabric from Russia," he told Business Line.

The oil price movements in the international market have a significant bearing on the prices of synthetic rubber, which are to a large extent imported by the Rs 9,700-crore domestic tyre industry.

Mr Kanwar said that the war-influenced movements in international oil prices are not having any major adverse impact on the prices of the imported petro-based raw materials.

He added that ATL was "well on course" to achieving the Rs 2,000-crore turnover target that the company had set for itself for the 2002-03 fiscal.

On the impact of proposed value-added tax (VAT) regime on tyre prices, he said that the final picture was still unclear as most of the States are yet to enact the VAT legislations.

"Broadly, we can take a judgement that customers in some States will pay a higher price. The current band of sales tax is 8-14 per cent. We are talking of revenue-neutral rate of 12.5 per cent. It all depends on which side of the range the customer is prior to VAT implementation."

Mr Kanwar also said that the company has not made an in-depth assessment of the implications of a VAT regime on the (raw material) purchase side and the changes that may be required to its supply chain to bring about cost-efficiency in procurement.

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