Even as the monsoons herald their mighty rainy presence for the thirsty agriculture sector in India, the Alliance Tire group (ATG) is gearing up to meet the farmers’ and also other infrastructure’s fast-growing needs in the highly-competitive, prospective US$ 1.5 billion Indian ‘Off-Highway’ Tyres market with numerous products and expansion plans for both “Brownfield” and “Greenfield” projects, according Angelo Noronha, President, APAC and MEA, ATG.
“ATG’s presence in 120 countries across 6 continents include agriculture (50%), construction (35%) and forestry (15%) with global sales being Europe (40%), North America (40%) and remaining 20% in rest of the world, where India itself is a US$ 1.5 billion market in the global US$ 15 billion market,” he said.
“How important India is to us can be seen from the fact that we have developed 60 products for this market with another 40 underway where the farm sector has three main products (front, rear and trailing equipment on Tractor), besides other products for the complex construction sector. As we keep studying the Indian market, we will be customizing our global products for this market with usage and maintenance according to their various needs.”
“Where our investment in India concerned, our CAPEX utilization is almost 90-plus and, with adequate capacity of 180,000 tonnes in all three plants (2 in India and one in Israel), we will soon be reaching full capacity this year itself. So while our core team is working out our next global five-year-plan including India (the earlier five-year-plan gets over in 2021-22), we will be investing back into ‘Brownfield’ and ‘Greenfield’ plants in India — based on a study set for completion in the next four months or so.”
Highlighting ATG’s history, Noronha said “We acquired two brands – Alliance of Israel (which was very strong in Europe), and Galaxy of USA (strong in North America) – that are strong in the agriculture and industrial construction segments, and are servicing their over 60-years markets, before being acquired 100% by Yokohama (Japan)and growing from a US$ 80 million to US$ 600 million company between 2009-2018.”
With application-specific, purpose-built tires for both aftermarket and OEM customers, the ATG is targeting Off-highway business in India’s agriculture and industrial construction sectors, and has set up two plants in India at Tirunelveli in 2009 and Dahej in 2013. “We are making only off-highway rubber products and have introduced 60 sizes customized specifically for the India market – where agriculture features tractor-related products and industrial construction with backward-loader, pick-and-carry crane, compactor, grader etc,” he noted.
“Our CAGR is between US$ 4-5 million and we believe the India tyre replacement market will greatly benefit from these 60 new products which are being highlighted by 43 specialised consultants, besides also through 350 agri-sector dealers in 20 states, and 70 non-agricultural (industrial construction) distributors in 22 states.”
“We are putting tires on machines of Indian OEs whose products are exported, while testing is going on for such machines sold in India. Despite intense competition from 40-50 years-experienced players in the Indian market, our long-term strategy lies in highlighting our 60-year global presence, technology and product library including 3,000 SKUs, and 250-350 customized products for any given market, alongside related R&D and testing in field differentiations where we create awareness about these products to farmers/operators for deriving maximum beneficial operational advantage. “
Replying to a question, he said “In the next five years, we will be among the top three manufacturers — or close to 25% –in the India off-highway tire market. We have 3-4% market share now and are not looking at double-digit growth but only exponential growth. Our R&D expenditure is 3-4% of our US$ 600 million turnover from our mixed portfolio balanced across segments and geographies globally.”
