Welcome

to
Business Sensitization
Workshop
for
Union officer bearers
and
DR’s
Contents…

1. Your Contribution : just outstanding and Marvelous!!!

2. Apollo’s Contribution in life !!!

3. Understanding of Business cycle

4. LPG and it’s impact on Business

5. Current Business Scenario (Tyre industry)

6. Key Business challenges

7. Mantras to meet challenges

8. Your role as a Business Partner

9. Success stories : EICHER ,TATA

Your Contribution
Just outstanding
and
Marvelous !!!
Thank you !!!
 Apollo Journey from 1991-2010
Key Achievements
1991 : Bias plant started
2000 : Radial plant started
2009 : IMS certification
2007 - 2010 : Mfg Excellence Awards : Limda Bias
2007 - 2010 : HR Trophy for Innovative HR Practices @ Limda
2008 -2009 : Won Shram shri Award-twice
2009-2010 : Excellence Award to QC Team @ International Competition
2010 : IMEA Gold Category Award by Frost and Sullivan
• Participation in various Employee Development Initiatives
• Participation of QC teams at Regional, State and National level and won prestigious
Awards
•Always setting New Benchmark of productivity
•Shouldered in all adverse situation as ONE TEAM
 Apollo’s
Contribution
In
Life !!!
 Apollo’s Contribution in Life !!!

Where we were ?
Vs
Where we are today ?
• Progress from Individual to family
• Identity changed
• Societal status – reputation and credibility
• Emotional development
• Economic capability-Wealth generation
• Living standard -uplifted
Understanding
of
Business Cycle
 Understanding of Business cycle

Four Stages of Business

Stage :1 : Start-up/Creation
Stage :2 : Growth
Stage :3 : Maturity
Stage :4 : Recession/Decline
Liberalizations, Privatization
Globalization
and
it’s impact on Business
 LPG and it’s impact on Business

Need for Liberalization/Privatization/globalization :

 In 1980’s Indian Economic was based on government control and a

centrally operated market.
 No consumer oriented market and foreign investments
 Economic condition of country was poor and standard of living didn’t go up
Initiatives of Liberalization / Privatization / Globalization

 1990’s LPG started by Congress government

 Devaluation of Indian Currency by 18-19 % to resolve BOP crisis
 Disinvestment of Public Sectors
 Dismantling of The Industrial Licensing regime
 Allowed Foreign Direct Investment
 Removed restrictions on imports etc
 LPG and it’s impact on Business

Impact of LPG on Indian Economy

 India became huge Consumer driven market

 Tough Competition among business
 Public sector became private sector and became more competitive
 Foreign companies started investment
 Economic conditions improved
 Living standard improved
 Employment opportunity increased
 Monopoly market abolished – Customer became King of Market
 Importance of Productivity, Quality, Cost, Service and timely
delivery increased
 Recession
and
it’s impact on Business
Recession and it’s impact on Business

 Recession take place when Consumer loose confidence in the growth of

economy and spend less which leads to decreased demand of goods and
services and in turn leads to decrease in production, Lay-offs and rise in
unemployment.

 Recession started in 2008-2009 and affected strong countries like America,

Europe and Japan

 Recession remains for min 6 months to 2 yrs

 Facing severe crisis of liquidity and credits

 US is facing major crisis because Home loan defaults, Rise in oil prices,
Global inflation, High unemployment rate, declining dollar value.
Recession and it’s impact on Business

US recession Impact on India:

 Industrial growth declined, Exports declined

 Outsourcing projects are on hold
 Foreign investors pulled out of stock market
 New projects and ventures are on hold
 Severe liquidity crisis

US Recession Impact on Tyre Industry :

 Automobile industry affected badly

 Reduction in domestic market affected operating margin
 OEM requirement reduced drastically
 Tyre export business declined
 Freight and Cargo movement declined as a result replacement
market hampered
Current Business Scenario
(Tyre Industry)
Current Business Scenario
Tyre Industry in India

 Total Value Rs.25,000 cr

 Highly Raw Material intensive

 Predominantly a Cross Ply (or Bias) tyre Manufacturing industry.

 Indian tyre industry is highly concentrated wherein 10 large

manufacturers account for over 95% of the total tonnage
production of 11.35 lacs M.T. on an average,

 55% of the production is for replacement market, followed by

29.8% sold to OEMs directly and the remaining is exported.
Current Business Scenario (Tyre Industry)
Competitive Scenario

Truck and Bus Tyres Light Truck Tyres

Others, 3%
Others, 19%
Birla, 15% Apollo, 27% Apollo, 28%

Birla, 4%
Ceat, 14%
Ceat, 7%

MRF, 22% JK, 19% MRF, 22%

JK, 20%

PCR Tyres
Others, 3%
Apollo, 16%
Bridgestone, 20%

MRF, 24%
Goodyear, 13%

Ceat, 3%
JK, 20%
Business Challenges
 Key Business Challenges
Hikes in Raw Material prices ( Constitutes 75% of production cost)

Natural Rubber Cost

200.00

180.00 179.42
160.00

140.00

120.00
115.91
100.00 108.67
97.47
80.00

60.00

40.00

20.00

Difficult to0.00
pass on increased RM Cost to Customer
2007-08 2008-09 2009-10 2010-11

Price (Rs /k g) 97.47 108.67 115.91 179.42

 Key Business Challenges

Fuel Cost
30.00

24 24.5
23.58
20.00 21.86

10.00

0.00
2007-08 2008-09 2009-10 2010-11

Price 21.86 23.58 24 24.5

 Key Business Challenges

Power Cost/kwh
10.00

8.00

7.07 7.1
7.04
6.00
5.84

4.00

2.00

0.00
2007-08 2008-09 2009-10 2010-11

Price 5.84 7.04 7.07 7.1

 Key Business Challenges

Rs/kg (Bias)
15.00

12.92 12.99
12.89
11.9
10.00

5.00

0.00
2007-08 2008-09 2009-10 2010-11

Rs/kg(Total) 11.9 12.89 12.92 12.99

 Key Business Challenges

Radialization

 Approx. 60% of Apollo’s production is Bias Truck and Bus Tyres.

 Passenger car Tyres are fully Radialized
 Truck and Bus Tyres are 12% Radialized but the change to radials is
happening fast
 As Radialization increases, threat from imported tyres will increase, which
may affect Apollo’s profitability

Unresolved Tax regime :

 Import duty on natural rubber is 20% but import duty on finished tyres is as
low as 10%
Key Business Challenges

 Dumping from China and South east Asian Countries :

Increased dumping low cost tyres from China

 Increased Retreading :

worn out tread of the old tyre is replaced with a new tread.
Retreading costs approximately 20% of a new tyre and is
therefore gaining popularity, especially in Southern part of the
country
 Mantras to Meet Challenges

 Productivity : High

 Quality of the product : Best of the Best

 Operational Cost : Very low

 Delivery of the product : On time

 Services to customers : Prompt

 Employee Morale : High

Your role as a Business Partner
Union leaders and DR’s should :

 Have good understanding about Business

 Have collaborative approach

 Respect workmen opinion and give feedback

 Encourage workmen to participate in various development activities

 Take responsibilities and play key role in efficiency and productivity

improvement.

 Take a lead and encourage workmen to participate in Quality and safety

initiatives

 Ensure healthy and harmonious relationship between union and Mgt

Be a Role Model for others

Case study

Companies faced challenges, survived and grew:

 Bajaj auto Ltd.

 KEC Ltd.

 TATA

Companies could not faced challenges and demolished:

 Premier Auto Mobile (FIAT)

 Mafatlal group

 Sarabhai group
Case study
Innovative ways adopted by companies and unions for
settlement

 Wage settlement for 10years : suzlon, lubrizol, port and doc workers

 No settlement concept : EICHER

 Stoppage of increment : Garware wall ropes

 Ceiling on DA : Hochest, Nicholas Piramal

 Canteen and Transport subsidy reduced : VOLTAS, GODEREJ AND OSWAL

 MOST adopted : Mahindra and Crompton

 Bajaj Auto produces 10 lacs bikes 850 workmen instead of 2200 workmen

 TATA produces 2 times production with more than 50% reduction in

Manpower
 Principles of KARMA
The Art of Living life by way of
God Krishna
 Thank U
Sun Never Set !!