Speech delivered by Dr. Onkar Kanwar, Chairman, Apollo Tyres at the company’s 48th Annual General Meeting held on July 23, 2021
It gives me great pleasure to welcome you to the 48th Annual General Meeting of Apollo Tyres Ltd. The directors’ report and audited accounts for the financial year ended March 31, 2021 are with you. As I look back at the financial year 2020-21, it has been a year of the dreaded corona virus, lockdowns, adapting to new ways of working and lot of uncertainty all around us. As the pandemic raged across the world, it brought in disruption for each one of us, for our families, our communities, for organisations and even for countries. As a global company with plants in three countries and employees in many more, it was a challenging time for us as we had to understand multiple scenarios.
The situation was different in each country and also kept changing fast. We could not have a uniformity of approach and had to learn quickly to live with the added complexity. I think the first and foremost focus of the leadership was to ensure the safety of all our Apollo Tyres’ family members who were working in the plants, at offices and from home. Within a short time, we created an entire ecosystem to ensure that our employees could work from their homes and yet continue business as usual. For our employees working at plants, we ensured that pandemic-appropriate behaviours were strictly adhered to and this helped us to operate without much disruption during most part of the crisis.
The year gone by was indeed a difficult one. We saw a long lockdown in India resulting in mass migration of people out of cities. As the economy went southwards, we saw demand going down sharply. We have always spoken about profitable growth and yet the impact of the pandemic on the economy and our business was such that for the first time in over two decades we announced net loss in the first quarter of the financial year. You have known your company as an agile and a resilient company. We were quick to understand the gravity of the pandemic and immediately launched initiatives to check on our costs.
While your company has been focussed on cutting cost over the years, the pandemic saw us working with renewed vigour to further our relentless focus on cost reduction and enhancing manufacturing efficiencies across the organisation. The whole year, we differentiated between good cost and avoidable cost and continued to invest in good cost like research and development, marketing, etc. and drastically reduced other costs as we renegotiated advertising costs, relooked at our warehousing expenses, etc. It is my firm belief that we need to drive unnecessary cost out of our business as that is the delta between a profitable and a losing organisation in this increasingly global industry.
Despite the pandemic, we continued with our belief that no challenge is so tough that it cannot be overcome or converted into opportunity. I am sure you remember the journey of your company and especially in 2008 when the world was in recession. With your support, our board was very confident of our strategy going forward and we decided to invest close to Rs 3,000 crore for a greenfield plant in Chennai. That was the best timing for the investment because we got a lead over all competitors in India by nearly 18 months. Similarly, even during the pandemic, our strategy of future-proofing the company helped us to commission our seventh manufacturing unit globally, and the fifth in India, in Andhra Pradesh. We also inaugurated our two-wheeler radial tyre facility in Gujarat as we set our eyes on building a leadership position in the highly profitable premium two-wheeler market.
In the new normal due to the pandemic, we continued with business as usual. We did product launches and expanded our dealer network but now virtually and digitally. We virtually launched the new identity of our product brand ‘Vredestein’ and this will allow us to position the brand, which has a legacy of over 110 years, as an even more premium brand and take our marketing activities to the next level. Americas is a large market and we had over the years been seeding the market. This year, we launched the Vredestein brand and its specially designed best-in-class product portfolio for the North American market. The response has been extremely good and we hope to make a mark with our products in the next few years.
In India, we launched a first in the industry – a tyre for the compact SUV segment called Apterra Cross. All these initiatives helped us to bounce back, gain market leadership in various segments and supported us to end the fiscal on a healthy note with robust revenue growth across market segments and geographies. However, if a company only focuses on profits and growth it is unlikely to create a long-lasting institution and leave a legacy for our children. For us the belief comes from within that without giving back to society no business can be truly successful and sustainable in the long run. It is for this reason that sustainability is at the core of your company.
During the year of the pandemic, we left no stone unturned to ensure that we live by one of our core values – ‘taking responsibility’. Our teams across the regions extended themselves to distribute food and other resources to people across the country. We will continue to extend ourselves to support and nurture the communities we interact with. As many of you are aware, after the deadly second wave in India, there is a talk of the third wave. I would strongly recommend all members and their families to get vaccinated. The vaccines offer a fighting chance against the virus.
Despite the uncertainty of the third wave, I remain bullish on the strength of the Indian and global economies. Your company is a dynamic company and has been mapping possible scenarios for the coming months and already drawn action plans accordingly. You know that your company does not rest on its laurels. We seek exhilaration and challenges and this is our way of future-proofing your company. In the current financial year, we have virtually launched the new vision, purpose and values for the next five years and have set an ambitious target of reaching USD 5 billion by 2025-26.
I am confident that with your support and the drive by our people, we will reach the target. I would like to conclude by thanking each one of you for having been a partner in this ongoing journey. Your support is highly valued and your company’s success is an indication of the faith you have always bestowed upon us. The support that we continue to receive from our banks, financial institutions and the governments wherever we operate enable us to plan for the future. With all this we shall continue to grow together as ‘Apollo One Family’.