Today, we have ushered into an era where India has emerged as one of the leading manufacturing and consumption hubs of OTR tires primarily in the Agriculture and Mining Segments. In order to meet the growing demand, manufacturers are complimenting their production capacities with rigorous Research & Development (R&D) and innovation, a telling example of which is the gradual shift to radialization.
Perhaps the driving force behind constant innovation is the rate at which OEMs are technologically upgrading their offerings for Mining and Infrastructure Sectors. Be they backhoe loaders, forklifts, tipper trucks, dumpers, cranes, or excavators, all equipments go through frequent technological upgradations these days, with respect to diversity of applications and hauling loads. And since OEMs are the major consumers of OTR tires, it's imperative that tire manufacturers periodically tailor their products in accordance with the clients' requirements. Apart from this, OTR tires of the modern age comply with the international standards and score high on abrasion resistance, fuel economy, and energy efficiency. Undoubtedly, innovation has emerged as the key to success.
He continues, "CEAT is consistently investing in R&D to ensure our tires offer the optimum performance and a complaint free service for our customers. The priority for customers can vary significantly and CEAT's USP is a broad portfolio that has the right tire for the customer. We do not believe that one-size-fits-all, and hence are constantly working with customers and OE manufacturers to better understand their needs and fold that into our product development."
He adds, "Our OTR tires have one of the lowest CPH (Cost per hour) in the industry. Our customized compound solutions help the customer to overcome his specific challenges like high abrasion, cuts and damages, and heat related failures."
He elaborates, "The prime feature of our tires is the value-for-money which translates into an economical cost of life. Secondly, we sell you a service rather than a product. We use high quality raw materials to manufacture OTR Tires which are produced with most advanced technologies and state-of-the-art machineries. Importantly, we strongly adhere to rigorous quality control mechanisms and each product passes through 450 stages of tests, and the end result is for everyone to see in the form of tires that are tough, durable, long lasting, and fuel efficient."
Foreign Technology, Radialization
Mr. Mundra believes that the Indian OTR Tire Industry, till now has been a success story on the back of a significant cost advantage vs. international players combined with strong quality and performance. "This industry however requires strong R&D capabilities and this requirement will only increase as average tire sizes increase, number of SKUs increase and radialization gains momentum. While till recently, the development by Indian companies has largely been in house, the above trends could force existing players to experiment with different models for accessing technology held by international players. Currently very few players have taken steps in this direction however till then companies like CEAT, are in parallel investing to enhance their in-house R&D facilities."
Talking about radialization, he avers, "Across segments, from passenger cars to commercial vehicles to OTR, customers have embraced radialization only once they see a clear value proposition. Customer education by tire companies and OE manufacturers plays a big role in this. In India, radialization is slowly but steadily increasing in pockets; for example in mining, it's being driven by two key reasons. Firstly, there's increased education by companies like CEAT which has led customers to take trials of radial tires. Secondly, increasing sizes of machinery, especially in mining, is automatically triggering increased radial demand. India, however, still has a long way to go and the adoption will depend on how successful these trials are, since customers expect that for twice the price, radials should give well more than twice the service."
And according to Mr. Sharma, Indian mining industry has already attracted all the top players, which has helped the customers get access to the latest technology. "The increasing presence of global OEs in this sector has resulted in creating more demand for radial tires. Also, the Mining Sector is now looking for complete service solution on cost per hour basis. The dumpers and loaders used in the mining and construction sector travel long distances beyond the normal roads suitable for radial application. Hence, in India, the bias tires are still in demand, which are meant for tough applications."
Says Mr. Sharma, "Yes, there has been a slowdown in the Mining and Infrastructure Sectors. However, our superior products, backed by the service support for our customers, have helped us to grow our market share even during this slowdown. OTR segment is a very niche one, where the marketing strategy is also customized for individual customers."
Meanwhile, Mr. Mundra has meticulously chalked out a strategic growth plan for CEAT. "While market growth is currently under pressure, CEAT's OTR business has been growing steadily in both domestic as well as international markets. CEAT has undertaken a number of strategic initiatives to achieve this. There has been increased focus on segments like cement, ports and construction that are showing good growth. In parallel, CEAT has also focused on becoming a partner to our customers as against a supplier - this has been achieved by investing in our key relationships through workshops and on-the-ground support to minimize their operating costs. CEAT has also been continuously investing in and improving key back-end processes such as logistics and R&D resulting in an increasing portfolio, lower costs and faster delivery times. Globally, an expanded product suite and an enhanced specialist distribution network helps in driving our growth."
According to Mr. Poddar, "To be very honest, the market for OTR Tires is not eroding at all. There is a transient blip or to be more precise, a momentary downward trend which has impacted almost every industry, leave alone OTR Tires. Despite the slowdown, the sales of machines have been constant as India has been steadily moving on the path of an infrastructural boom. Talking of Mining, well, the lack of appropriate policy and framework is to be blamed for the lull that this sector has been going through for a long time now. Although we are not into Mining in a big way, we are gradually directing our focus towards this sector. Moving on to marketing strategies, we always strive to provide value-for-money to our clients. Not only do we have the widest range of OTR Tires in our bouquet of offerings, we also possess the highest levels of adaptability. We try to understand the clients' requirements first and then tailor the end-product in accordance with that. One of the major reasons for BKT's enormous success has been its ability to establish the last mile connectivity with its clients."
Government Support Will Pave the Way
Mr. Sharma echoes this sentiment, "The ambiguity in the Mining due to lack of clear policy environment is affecting the sector in a big way. In spite of the huge potential, the demand currently is weak for the large size tires due to the regulatory issues in the sector. We look forward to a clear policy framework to enable the mining operations in the country and create demand for the OTR Tire industry."
BKT sees the situation rather differently. In the words of Mr. Poddar, "The first and foremost challenge is the lack of mechanisation in the Agricultural Sector in India. Despite the fact that ours' is an agrarian economy, we are yet to shift to machine-oriented farming practices in a major way. This stems from the fact that ancestral land is passed on from one generation to the other coupled with that the traditional farming practices and the mindset. The policy should aim at widespread awareness campaigns, educate farmers, and encourage them to shift to mechanisation. Agricultural equipment and machinery can be made available through incentives and finance schemes. Secondly, there should be fast track clearances of a swathe of mining projects which are stuck in doldrums due to scams and inappropriate implementation of policy and framework. This has left CE manufacturers and contractors in a worrisome state as they are uncertain about the future. The Government should highly prioritise on bailing this sector out of trouble."
Well, here's an industry that's upbeat on setting new benchmarks and adding to the country's growth. All it's asking for is a helping hand from the Centre!