‘292018 ‘Anli-dumping duly to help fre frms regain lst share -Livemint livelmint seb = Buocer zoe Ginar Ki Bat Home » Money Anti-dumping duty to help tyre firms regain lost share Since the removal of anti-dumping duty in 2015, cheap Chinese tyre imports have been th biggest threat to domestic firms’ revenue {growth and profitability Last Published Fi, Sep 220708 09 AM IT Vasa Kamat Ener emalfor newsletter te Pa ‘Anti cumging duty wil cerainiy improve tyre sles inthe coming quarters, given that the threat rom cheap imports is ff Photo Bloomberg After a long wait, Indian tyre makers can breathe easy again. The government's move to reimpose anti-dumping duty (ADD) on ‘truck and bus radial (TBR) tyres that are imported from China should ease the competitive pressure on domestic manufacturers in the replacement market. Since the removal of ADD in 2015, cheap Chinese tyre profitability. Tyre dealers concede that TBR tyre imports increased 10 times in the last five-six years, Today, TBRs constitute around two-fifths of total tyre imports and also a fourth of the total replacement market for TBRs. nports have been the biggest threat to domestic firms’ revenue growth and ‘Worse still, these tyres are nearly 25-30% cheaper than domestic ones. When rubber prices surge, like they did a few months ago the cost of produetion was higher than the price of imported tyres. “With the ADD of $245 to 453 per tonne to be in force for the next five years, the price of imported tyres will increase by 9-14%," says Bharat Gianani, an analyst at Sharekhan Ltd. ‘This will help domestic firms regain theie lost market share especially in the replacement commercial vehicle segment. hp:wwulverint. com Money/i3JeOxACxwbkkhns4hOeSxHiAntidumping-dulyto-help-tyre-fems-regain-lost-shate.hml‘292018 ‘Anli-dumping duty to help fre frms regain lst share -Livemint > => ‘The move will be most positive for JK Tyre and Industries Ltd where almost three-fourths ofthe total domestic revenue accrues from TBR tyre sales to the medium and heavy commercial vehicle segment. No wonder, the stock bounced by 6.5% on ‘Wednesday, when the news was announced, Apollo Tyres Ltd, Ceat Ltd and MRF Ld, too, have about half the sales accruing from this segment. Apollo Tyres’ overall replacement market to original equipment mix is about 77:23, So, ADD would lift tyre sales of domestic makers, especially given the buoyaney in auto sales. In other words, ADD will certainly improve tyre sales in the coming quarters, given that the threat from cheap imports is off and the auto sales have been on a roll too. ‘This is not all. Falling sales and production had lowered capacity utilization of tyre firms that had expanded capacity. This along, ‘with high rubber prices had challenged tyre makers’ profit margins, June quarter revenue and operating margins for most tyre firms were down to single-tigits in spite of robust auto sales. Fortunately, rubber prices look stable compared to other raw materials that go into making automobiles, like steel and aluminium, prices of which are skyrocketing. Set Up Your First Campaign With AdWords Now. Google A report by ICICI Securities 1d in August that spoke of the threat of Chinese tyre imports had pointed ont that only 115 Chinese ‘exporting units of the total of 1,994 had exported TBRs to India. Surplus Chinese capacity could easily be used to flood global ‘markets, Even a 1% ineremental diversion of Chinese exports to India could have a significant impact on pricing and market share of Indian-made tyres. ‘The imposition of ADD therefore, is timely and should lift the sentiment on the Street towards shares of tyre firms. First Published: Fri, Sep 22 2017. 07 21 AMIST onus: | Tynes) Tyremports | { aur-oumPImG DUTY DUAN TYRE MAKERS | | CHINESE TYRE IMPORTS You May Like spond ewe tet ‘The Laws that Shield Shanghai ‘Why investing t waka Expresay is beter than rest of Gargaon? Discover the Stowe ide of Hong Kong You Don't Have to Go Far forthe Great Outdoors hp:wwulverint. com Money/i3JeOxACxwbkkhns4hOeSxHiAntidumping-dulyto-help-tyre-fems-regain-lost-shate.hml 208‘292018 ‘Anli-dumping duly to help fre frms regain lst share -Livemint ‘Simple Method "Regrows" Hair Try Tonight Hotel rice Youre Not Allowed to See. ‘Your Childs Addicted to Smartphones, You Must Watch this Video EDITOR'S PICKS » Union budget to focus onkick-starting investments x ry Reliance jio to raise up to $2.2 billion debt to fund RCom deal - iW I] | ‘Budget 2018: Treading the fine balance between politics and fi Home Lounge ‘Specials compas ainda reams Opinion Money ‘on Sunday Inet scone coma Petes téion sont um sons Aawoing Sitemap dts besa vids into sic slne inasnines syndication sabe to our Nester yh ©2087 Wai A igh eset hp:wwulverint. com Money/i3JeOxACxwbkkhns4hOeSxHiAntidumping-dulyto-help-tyre-fems-regain-lost-shate.hml 30