Focus on supporting customers by lowering TCO
Alliance Tire Company (ATG) is one of the fast-emerging brands in the OTR tyre segment globally. A fully-owned subsidiary of Yokohama Rubber Co., of Japan, ATG has two plants in India and one in Israel, the country of the company’s actual origin. With the global market size for OTR tyres going up steadily and the technology demands of the sector rising proportionally, ATG is ready to challenge the big names in the space with its quality and reliable products, backed by its unique approach.
We spoke to Mr. Angelo Noronha, President – APAC & MEA, ATG, to find out more about the company and its plans to take on competition.
Excerpts:
Please give us a brief background about ATG. When and where was the company founded and how has it grown over the years?
We are one of the fastest growing off-highway tire companies in the world. We cater to the agriculture, construction, forestry and material handling segments. The company was formed when Mr. Yogesh Mahansaria, in partnership with Warburg Pincus, acquired the Israel based Alliance Tire Company in 2007. After that, we bought the GPX OHT, an American tire company in 2009. We set up two plants in India and moved the bulk of the production here. The cost advantage in this enabled us to gain market share across the world. In 2013, Warburg Pincus sold its stakes to the global investment firm KKR, and finally in 2016 we were completely acquired by Yokohama Rubber Company. Now we are a fully owned subsidiary of Yokohama Rubber which is one of the world’s largest tire companies.
What is the product range offered by ATG? What are the segments you cater to?
ATG has one of the widest ranges of tires for the off-highway segment. We provide tires to the agriculture, construction, forestry and material handling segments, both to the original equipment manufacturers and the aftermarket. Our products are both application and market-specific. We have over 3,000 SKUs, meaning if there is a vehicle used in the above-mentioned segments, chances are high we have the tires for it. We are the only independent off-road tire company with field engineers across the world. This enables us to be proactive in identifying the customer needs and developing new tires accordingly.
What share of your business comes from OEMs and how much from the aftermarket? Do we see this balance shifting in either side’s favour in the coming years?
ATG’s renowned brands – Alliance, Galaxy and Primex – are the preferred choices among OEMs worldwide. About 25% of our business comes from our OEM associations and the rest from the aftermarket. Of course, as a world-class manufacturer we would want every farm, industrial, construction, material handling and forestry machine to roll out of their factories on our tires. We today are working with all major machinery manufacturers across the globe and are in constant endeavour to increase our share of business with them.
Tell us more about your three manufacturing facilities – one in Israel and two in India. What kind of capacities do you have and what advantages can your company boast of as compared to your competitors?
Between the two plants in India and one in Israel, we are currently producing 150,000 tonnes of tyres per annum. The locations of our plants provide us with the strategic advantage of being close to the ports, which in turn helps in the efficient and timely delivery of products worldwide. Our Tirunelveli plant and Dahej plant are both chosen for their strategic proximity to big ports. This, in turn, helps in saving time and costs in transportation. Our new plant in Dahej is one of the world’s largest off-road tire factories. We have full-fledged R&D teams at our plants. Most importantly, we have access to Yokohama’s 100 years of technology expertise that sets us apart from the other companies in this line.
There are already some very strong brands offering products exclusively for the OTR segment, both in India and globally. What kind of opportunity do you see for your brand in the Indian market and also globally?
We are a well-known brand globally. Our products are both application and market-specific. We had not spent too much time in our home market India, but for the last two years, we are working on changing that. Though the market is competitive, we are making great progress today. We are present in almost all the States in India. Our USP is the global expertise we bring to our products and our wide range to choose from. Our tires deliver better value to our customers.
Amidst such a competitive environment in the tyre space, both in India and overseas, what USP does ATG bring to the market and how do you plan to leverage the same to expand your market presence?
We believe in providing better value product at a lowered total cost of ownership. This works as the driving philosophy for all our products across all the segments. Since India is also a value conscious market, this helps us. How can one say ‘no’ to a product that in all respects is as good as the global leading brands but at a value price point?
What kind of potential do you see in the Indian market and what is your medium- to long-term plan for the region?
The Indian off-the-road segment is pegged at $1Bn. The scope for growth is immense. The Indian market is now getting more and more quality conscious and they always were concerned about getting the best value for their money. So the scope for a brand like us which gives the global-best standard product at value-for-money pricing is huge. We just started focusing on the Indian market a couple of years ago, and we are just about done with setting up our channel here. The future is all about scaling up.
What targets do you aspire to achieve by 2020?
Our ambition is to be a $1Bn company globally by 2020, and for this we will look at increasing capacities or offerings as needed when the time is right. For now, we are fully equipped to handle the current business.