Financial Daily from THE HINDU group of publications
Wednesday, Aug 11, 2004
Marketing - Brands
India Tyres to explore possibility under Dunlop brand
Kolkata , Aug. 10
FOLLOWING in the footsteps of Apollo Tyres, the jumbo group of late M.R. Chhabria is exploring the possibility of outsourcing tyres from China, under the brand name of " Dunlop". The group has entrusted this job to India Tyres Ltd, a wholly-owned trading subsidiary of the Bangalore-based Falcon Tyres Ltd, which also belongs to the group.
The objective of outsourcing tyres is to keep alive the Dunlop brand name till the two production units of Dunlop India Ltd resume normal production. Production from both units still remains suspended owing to working capital shortage, while the management is waiting for a formal rehabilitation scheme for the company from the Board for Industrial and Financial Reconstruction (BIFR).
Even a few months ago, the Dunlop management was optimistic about resumption of production in at least one of its two units, by undertaking conversion jobs for Apollo Tyres.
Such hope is yet to fructify as Apollo Tyres, instead of outsourcing tyres from any domestic company, has started outsourcing from China due to a competitive conversion rate.
The tyres outsourced by the company from China are now being sold in the eastern region markets. In fact, Apollo Tyres has also stopped outsourcing from the State-owned Tyre Corporation of India Ltd (TCIL) since April.
According to a TCIL source, Apollo Tyres has not yet signed an MoU with the company for conversion job for the current financial year, although TCIL was its main source for converting its truck tyres for the last couple of years. The source felt that Apollo might take interest once again if the conversion rate is reduced by TCIL.
Meanwhile, local tyre market sources have confirmed that at least half a dozen tyre dealers were approached by India Tyres, seeking their co-operation to market tyres, to be outsourced by the company from China under the Dunlop brand name. The dealers, who were approached are already dealing in Chinese tyres.
The management of India Tyres is waiting for a response from the dealers so that the company can open negotiation with the Chinese tyre makers.
It may be noted that India Tyres is already marketing various Dunlop brand industrial rubber products, which are outsourced from different domestic small and medium companies. If everything goes well, tyre will be its additional business portfolio till Dunlop resumes normal operation.
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