A PROJECT ON

ORGANISATION STUDY CONDUCTED AT

APOLLO TYRES LIMITEDSUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF THE DEGREE OF

MASTERS IN BUSINESS ADMINISTRATION.

BY

PRASIDH PRASAD

2010-2012

UNDER THE GUIDANCE OF

PROF.LAKSHMI IYER

CHRIST UNIVERSITY INSTITUTE OF MANAGEMENT

BANGALORE

DECLARATION

I hereby declare that the organization study conducted at Apollo Tyres Limited is a record of an original work done by me under the guidance of Prof.Lakshmi Iyer , faculty member, CHRIST UNIVERSITY INSTITUTE OF MANAGEMENT and this project work has not performed the basis for the award of any degree or diploma/fellowship and similar project if any.

PRASIDH PRASAD

2010-2012

ACKNOWLEDGEMENT

I owe a great many thanks to a great many people who helped and supported me in conducting the organization study at Apollo Tyres Limited , Kalamassery.

My deepest thanks to Prof. LAKSHMI IYER , faculty member,CHRIST UNIVERSITY INSTITUTE OF MANAGEMENT for guiding me with attention and care.

My deep sense of gratitude to Abi . C. simon,Associate Manager-Safety, Apollo Tyres Limited. for his support and guidance. Also I extent my thanks and appreciation to the helpful people in the company for their support in doing the project.

PRASIDH PRASAD

INTRODUCTION

Organisation has gained momentum over the past few decades as the inevitable source to sustain business activities. An organization is a power house of resources through which manufacturing and production activities are effectively carried out.The established Indian owned enterprises has been steadily increasing their capacity and widening their range of products for every organization. There is a hidden asset.An asset that has the power to execute, the vision to excel and the spirit of limit-less energy.It is a force that is unstoppable; it is the force of capital.

Today india is in the midst of rapid economic growth.The government’s continued emphasis on building infrastructure has given a tremendous fillip to the development of road infrastructure and transport. Obviously, the number of vehicles on road have a marked increase.As a direct fallout of this scenario the tyre industry has had the good fortune of receiving increased orders from original equipment manufacturers (OEM) and replacement markets alike.

INDIAN TYRE INDUSTRY – A PROFILE

The Indian tyre industry is about 25,000 crore and is growing at a compounded annual growth rate (CAGR) of 6-8 per cent.In terms of volume, about 1.2 million commercial tyres and 1.5 million passenger vehicle tyres are manufactured annually.The industry is ominated by 4 players-MRF, APOLLO, J.K and CEAT.

Ranking of Indian tyre companies on the basis of production

1. MRF Tyres Limited

2. Apollo Tyres Limited

3. JK Tyres Limited

4. CEAT Tyres Limited

5. Birla Tyres Limited

6. Good Year India Limited

7. Vikrant Tyres Limited

Indian tyre manufacturing companies are re-engineering their business and looking at strategic tie-ups world wide. The future is expected to see many strategic alliances among the domestic and global players. They include the OEM segment with vehicle manufacturers looking for fresh tie-ups or strengthening of existing partnerships.The tyre industry has evolved from the more basic cross ply products to the more sophisticated radial tyres.Radial tyres have shown significant increase in usage every year.Most of the automobile segment have shifted to radial tyres and the usage of cross-ply is restricted to trucks and buses only.

COMPANY PROFILE

Apollo Tyres Ltd is a high-performance company and the leading Indian tyre manufacturer. Head quartered in Gurgaon, a corporate-hub in the National Capital Region of India, Apollo is a young, ambitious and dynamic organisation, which takes pride in its unique identity. Registered as a company in 1976, Apollo is built around the core principles of creating stakeholder value through reliability initsproducts.

Apollo’s present strength and market dynamism steps from its early years of strife in establishing itself as a tyre manufacturer within the closed Indian economy. Over two decades, Apollo worked on a portfolio of products, tuned to customer needs and an array of innovative marketing initiatives to establish itself as a leader in its home market. Some of these include segmenting customers by their load and mileage requirements, running tyre loyalty programmes and establishing customer contact programmes.

For the first time, in 2006 Apollo ventured outside India in its quest to test itself outside its home comforts. Apollo acquired Dunlop Tyres International Pty Ltd in South Africa (since renamed as Apollo Tyres South Africa Pty Ltd) and Zimbabwe, taking on southern Africa as the second domestic market. The company holds brand rights for the Dunlop brand across 30 African countries.In 2009, Apollo acquired Vredestein Banden B V in the Netherlands, and thereby adding Europe as its third crucial market.

The company currently produces the entire range of automotive tyres for ultra and high speed passenger cars, truck and bus, farm, Off-The-Road, industrial and specialty applications like mining, retreaded tyres and retreading material. These are produced across Apollo’s eight manufacturing locations in India, Netherlands and Southern Africa. A ninth facility is currently under construction in southern India, and is expected to commence production towards the end of 2010. The major brands produced across these locations are: Apollo, Dunlop, Kaizen, Maloya, Regal and Vredestein.

HISTORY OF APOLLO TYRES

Apollo Tyres Ltd. (ATL) was incorporated in 28th September, 1972 as a Public Limited Company and obtained certificate of Commencement of Business on October 24, 1972. The Company was promoted by Bharat Steel Tubes Ltd., Raunaq International Pvt. Ltd., Raunaq & Co. Pvt. Ltd., Raunaq Singh, Mathew T. Marattukalam and Jacob Thomas.The company was taken over by Dr. Raunaq Singh and his associates in 1974.The implementation of the tyre project took place in 1976 at Perambra in kerala.

The research and development of Apollo tyres took place at Perambra and later it had grown to a substantial height and stature at its present location at Limda, Baroda.All the activities in the R&D center are extensively supported by a series of highly sophisticated equipment that help the research scientists develop products as per customer’s specific requirements.

PHASES OF DEVELOPMENT

1972. The company’s license was obtained by Mr.Mathew T Marattukulam, Jacob Thomas and his associates.

1974. The company was taken over by Raunaq Singh and his associates.

1975. Perambra plant foundation stone was laid down.

1975. Apollo Tyres Limited was registered.

1977. Plant commissioned in kerala with 49 TPD capacities.

1982. Manufacturing of passenger car radial tyres began in India.

1991. The second plant commissioned in Baroda, Gujarat.

1995. Aquired Premier tyres in kerala.

2000. Exclusive radial capacity established in Baroda.

2003. Radial capacity expanded to 6600 tyres per day.

2004. Launch of Apollo Accelere H speed rated car radials.

2005. Peramra plant completes thirty years.

2006. Dunlop South Africa and Zimbabwe was acquired.

2006. Expansion of passenger car radial capacity to 100000 tyres per day.

2006. Launch of India’s first range of ultra-high performance V and W-speed rated tyres.

2006. Opening of Apollo Tyres health care clinic in Ukadam,Tamil Nadu.

2006. Launch of Dura tead, trading material and solutions.

2007. Launch of Apollo truck and bus radial tyres.

2007. Launch of Apollo Tennis Initiative and mission 2018.

2008. Integrating the global product portfolio by rebranding the Dunlop brand and rolling out new Dunlop Zones across South Africa.

2009. Aquired VREDESTEIN BANDEN B V in the Netherlands.

CORE VALUES OF THE COMPANY

C - CARE FOR CUSTOMER

R - RESPECT FOR ASSOCIATES

E- EXCELLENCE OF TEAM WORK

A- ALWAYS LEARNING

T-TRUST MUTUALLY

E-ETHICAL PRACTICES

VISION

“A significant player in the global tyre industry and a brand of choice, providing customer delight and continuously enhancing stakeholder value”

COMPANY MISSION

A journey called “Passion in Motion”to be a US$ 2 billion companyby the year 2010.

COMPANY AT A GLANCE

Name of the company : Apollo Tyres Limited.

Business : Manufacturing and marketing Automobile tyres

Registered Office : Cochin, Kerala

Head Office : New Delhi

Manufacturing Units : Limda-Gujarat, Perambra & Kalamassery- kerala

Conversion Unit : TCIL- Calcutta

Technical collaboration : Continental General Tyres, USA

BOARD OF DIRECTORS

Chairman : Onkar. S .Kanwar

MD : Neeraj R S Kanwar

Principal secretary ( Industries) , Government of kerala : T Balakrishnan

Principal secretary(finance), Government of kerala : L C Goyal

Former chief executive, Dunlop Tyres International(Pty) Ltd. : Michael J Hankinson

Chairman , J M Financial Group : Nimesh M Kampani

MD, Apollo Tyres International Ltd. : Raaja Kanwar

Former principal secretary to the prime minister of India : Dr S Narayan

Chief, Corporate Affairs,ATL : U S Oberoi

Former Chairman , Industrial Development , Bank of India : M R B Punja

Share Holding Pattern

Promoters : 39.35 %

Fls / Banks / Mutual funds : 15.46 %

FIIs / NRIs / Foreign Bodies Corporate : 26.05 %

Public : 17.16 %

Govt. of Kerala & others : 1.98 %

MARKET SHARE

strong appetite for expansion saw Apollo becoming the number one tyre manufacturer in the truck and bus tyre(Heavy Commercial Vehicle) segment in india. With an average monthly production of 2,72,911 tyres, it ended FY 09 with a 26 per cent share in the HCV segment. In the passenger car segment, Apollo had

an average monthly production of 2,63,779 tyres during FY 09, and ended the year with a 19 per cent shae, behind only MRF with a 24 per cent share.

OPERATING AND FINANCIAL HIGHLIGHTS OF THE COMPANY

EBIDTA

NET PROFIT MARGIN:

NET SALES:

RETURN ON CAPITAL EMPLOYED

EARNING PER SHARE:

DEBT/EQUITY:

RETURN ON CAPITAL EMPLOYED:

PRODUCT PROFILE

Products Brands

Truck Apollo

Loadstar Super Hercules

Loadstar Super Loadstar Super

Gold XT 7 XT 7 Haulug XT7 Gold XT-9 XT-9 Gold

Champion Champion DXL Champion Gold Amar Amar Deluxe Amar Gold Amar AT-Rib

Kaizen

50 L 36 L

27 L 77 R

Commando XDT

99 R Plus

Light Truck

Loadstar Super Amar Deluxe Amar Gold XT-9

XT-9 Gold Duramile Milestar Champion

Passenger Car

Car Radials

Tube Type (Amazer XL Quantum)

Tubeless Radials

4x4 Radials

Hawkz Storm

Amazer XL

Alloy Wheels

Haste Torque Nirvana Frost Quest

Inspire Slay Multispoke Sphere Cinco

Tubeless Radials

Acelere Amazer XL

Hawkz

Conventional Tyres (Bias Tyres)

Car Armour Panther

Jeep Gripper Maha Trooper

Farm Pure Cultivation Segment

Sarpanch Krishak Super

Pure Haulage Segment

Powerhaul

Mixed Application Bias Segment

Krishak Premium

Mixed Application Radial Segment

Farmking

Jeep Gripper Maha Trooper

DEPARTMENTAL PROFILE

1.INDUSTRIAL ENGINEERING DEPARTMENT

Objective

To plan, design, implement and manage integrated production and service

delivery systems that assure productivity, quality, reliability, maintainability and

cost control to keep the ATL globally competitive.

Functions

1. Conduct work studies ,improvement studies in various equipment and

fixation of norms

2. Capacity calculations in various equipment from time to time

consequent to various changes

3. Design ,implementation and following incentive schemes in various

zones

4. Planning and assessment of manpower requirement in various

departments periodically

5. Studying plant layout and material handling systems and suggesting

improvements

6. Explore the possibilities of capacity expansion and prepare the project

reports

2. PRODUCTION PLANNING AND CONTROL DEPARTMENT

The production planning and control department is responsible for fixing monthly

production levels, meeting production targets ,scheduling machines as per the

requirements ,employees ,developing subordinates and the preparation of raw

material requirements based on monthly production ticket.Other functions of the

PPC Department includes

Preparation of monthly production plans

Communication of organizational goals down the line

Prepare adjust and issue of different operations based on the programs,

inventories, programs of work and specifications

Follow up programs of work in all sections

Report relevant details and assist to maintain steady progress of work

Take physical inventories from the stores of finished goods and raw

materials

Maintain records of inventories

Report shortage ,rejection, and delay in the operations and take corrective

measures

Maintain good housekeeping

Ensure that no material is leftover when size changes occur

keep record of non moving material, unidentified material ,scrap generated,

obtained disposal instruction, report follow up actions and to clean up

materials

Preparation of raw material requirement based on monthly production

ticket

3.SYSTEMS DEPARTMENT

It deals with computing all activities .The systems department is a network of 100

PC’s which are interconnected in a LAN with the use of optical fibers. The head of

this department monitors all of the software requirements of all the departments

with the help of the executives under him.

All the IT initiatives in Apollo are integrated with the overall corporate strategy.

Integration of the company is achieved by the implementation of the commonly

used ERP software; SAP enables ATL to connect a vast network of 140 centers by

converting them into a single source of data centre.

4.PRODUCTION DEPARTMENT

The Kalamassery plant with an installed capacity of 100 MT/day contributes approx. 300 Cr to the total turnover of the Apollo group. The daily production target of the Kalamassery unit is 100.81 metric tonnes. Production is carried out in three shifts. Every month end, production intends are obtained from the marketing department of Apollo tyres Ltd, Delhi stating how much tyres need to be manufactured. Kalamassery plant primarily focuses on the bias tyres production.

The production department is divided into three main divisions based on the various stages of tyre manufacturing :

The main functions of Division 1 are:

1. Mixing2. Dipping3. Calendaring4. Extrusion

Division 2 has the following functions:

1.Bias cutting2.Band building3.Stock preparation4.Tyre building

Division 3 mainly deals with:

1. Tyre curing 2. Final inspection

5.QUALITY ASSURANCE DEPARTMENT

The main duty of the quality assurance department is the determination of the

quality standards, measurements of the actual quality, compares it against the

standard and controls whether established standards are maintained and

practiced.

Functions

1. Inspection of incoming raw materials

2. Auditing involving the control of non conforming materials or processes

3. Auditing of finished products

4. Solving customer complaints

5. Testing process

Tools of Quality Assurance Department

1. Quality manual: It states the policies and principles of the quality

system in use.

2. System procedure: It functions as guidelines to units ensuring

uniformities in the quality system.

3. Quality meeting: Such meetings are held every month and each

department gives suggestions for the scope of improvement. Internal

quality audits are held every 6 months.

4. Quality policy: ATL follows a strict quality control policy to enhance

customer delight and also pays special attention to retain quality of

products.

6.R&D, TECHNICAL DEPARTMENT

R&D, Technical department monitors market needs for new product

development. The result specifications are passed on to the production

department for simulation.

The R&D, Technical department is divided into two divisions:-

1. Tyre engineering section: decides upon the suitable specification of the

tyre, and designs it. Then they further see to the fact that the tyre is

produced according to the specifications issued by them.

2. Tyre compounding section: decides upon the chemical composition of

the product, dealing with the chemistry of mixing, calendaring and

dipping.

7. ENGINEERING DEPARTMENT

The engineering department is the service department and provides its service to

various departments such as production, technical, quality, assurance and

engineering. The major function of the engineering department is manufacturing,

installation, maintenance and repair of machines. All machines are checked

regularly. The machine history is recorded so that the life of a particular machine

can be known and used respectively.

Maintenance is the key function of this department, and is classified as:

1. Preventive maintenance

2. Breakdown maintenance

Preventive maintenance means preventing the machines from any possible

breakdown and breakdown maintenance means repairing the faulty machines.

Engineering department undertakes periodic checking of all machines. Shift

engineers study the problem in detail and the required repair work is done. The

required spares are available from various engineering stores. The machine is

then checked and production officers close the notification.

8. HUMAN RESOURCE AND ADMINISTRATIVE DEPARTMENT

Structure of HR department

Group manager leads HR department of ATL, HR manager deals with working life

of a worker, from the time of his entry in to the organization until he leaves. It

basically includes activities such as HR planning, job design, performance

appraisal and job evaluation and motivation, welfare, safety and multi facts of

Industrial Relations.

Key functions:

To design and implement procedures, policies and systems those are

transparent and help in achieving company goals.

Industrial relations

To boost productivity and improve quality through internal customers

Developing people and teams

Managing change

Integrating people into the company’s vision, culture and philosophy

Manpower planning, recruitment, employee orientation

Induction, conformation, campus recruitment and internal recruitment

Travel, transfer, ambulance room, statutory compliances

Compensation policies, attendance and leave administration, payroll advice,

performance appraisal, training and development, benefit administration,

disciplinary action and safety

Focus areas of HR Functions

HR philosophy of Apollo Tyres Limited

Aims to play an active role in enabling the success and growth of the

organization

Continuous improvement in the quality of people and their approach

towards customer service

Providing newer and more effective methods of managing and leading

HR oriented growth strategies guide towards top level decisions

Strives to maintain a balance between qualitative and quantitative results

Creation of an organization wide involvement with the concept of HR

Commitment of the top management, which is the backbone for the

success of all new HR initiatives

The main functions of the HR department involve

1.1. Manpower planning

2.2. Recruitment

3.3. Selection

4.4. Performance appraisal

5.5. Training and development

MANPOWER PLANNING PROCESS

The manpower planning process is directly linked to the long term business plans

of the organization. The manpower planning exercise is conducted annually to

assess the manpower requirements of the organization.

At the beginning of each calendar year, Corporate HR interacts with each

Department/Function in each Unit/Division to collect their manpower

requirements in conjunction with the annual projected business plan.

The following factors form the basis for the manpower planning exercise:

Product Mix

Optimum equipment capacities

Existing manpower

Envisaged organization structure

Comparison of actual versus expected productivity ( measured in terms of

Kgs/man-hour)

Inter-unit comparisons for common functions

RECRUITMENT POLICIES

A well designed and pre-planning recruitment policy, based on corporate goals,

study of environment and corporate needs is essential for implementing the

organization mission and objectives.

The recruitment policy asserts the objectives of the requirement process and

provides a framework of implementation of the recruitment programme in the

form of procedures.

Recruitment is carried out in accordance with the annual manpower plan.

Broadly, requirement activities are done at either entry level or lateral level to

cater to:

Replacement vacancies (occurring due to resignation, retirement or

transfer)

Additional vacancies ( created due to company’s expansion / diversification)

SELECTION

The job profile is communicated to the consultants and bio-data of candidates

are invited. The screening of bio-data is completed first by the concerned HR

department and then by the concerned Functional Head. An application blank is

filled is filled up by the candidate to facilitate the interview process. The

preliminary interview is conducted by the HR department. The final interview is

conducted by a panel consisting of the concerned Functional Head, and in case

of key positions, also by the president and/or VC&MD.

PERFORMANCE APPRAISAL

Objectives

The performance appraisal system has the following objectives:

1. Assessing past performance

2. Providing rewards for performance

3. Goal setting for the future

4. Assessing training needs

5. Assessing potential for growth

Eligibility

All employees are to be covered under the annual appraisal, however, the

trainees and probationers are eligible for appraisal only before their due date of

confirmation.

Performance appraisal is to be done by the immediate superior to whom the

appraisee is directly reporting, and the review is to be done by the department

Head. In cases where the functional and administrative reporting are separate,

both the appraisers are to asses independently and arrive at a joint decision (if

location factors are a constraint, then two separate forms are to be given to both

the appraisers and information collected is to be summarized by the HR

department.

TRAINING AND DEVELOPMENT

Objective

The training and development procedure of Apollo Tyres Ltd has the following

broad objectives:

1. To porn up identified functional skill areas of personnel for more effective

contribution to the organization.

2. To provide platform for personal growth and exploration leading to overall

organizational health and quality of life.

3. To develop human resource in consonance with broader corporate horizon

and long range vision of the organization.

The head of the corporate human resource is responsible for overseeing the

implementation of the training methodology. Respective Divisional HR is

responsible for implementing of the training procedure for the employee under

their purview.

HR department also has the following functions:

WELFARE MEASURES

The aim and objective of the welfare fund shall be to render financial assistance

to encourage cultural, sport, social and other welfare activities among the

members and to foster among them a spirit of mutual friendship, cooperation and

understanding. The organization provides good welfare services to its employees.

The company runs a subsidized canteen on a contract basis. Rest rooms with

lockers and washing facilities, arts and sports club, library, etc are other facilities

provided. Transportation facilities are also provided to all employees. Company

buses will take the employees from different destinations for which they have to

pay a nominal amount. All the employees drawing a salary below 6000 are

covered under ESI and those who are exempted to ESI are covered under group

accident policy and MEDICLAIM policy. The welfare department also includes

insurance schemes, policies managing the welfare fund activities.

SAFETY

Safety section facilitates safe working conditions to all employees. The

organization follows all the provisions under the Factories Act 1948. All workers

are bound to observe safety precautions as directed and notifies from time to

time and use safety equipments or clothing as may be required by the

management. All accidents should be reported at once by the workmen

concerned to his immediate supervisor and in his absence to department head.

Workmen should engage themselves only to the operations at the machine to

which they have been appointment. Fire extinguishers are placed at reachable

points and the employees are trained to use them.

TIME OFFICE

The functions of the time office are as follows:

i. Maintain attendance record of the workers., staff and all employees

ii. Calculation of incentives

iii. Calculation of man-day, absenteeism, and maintain leave records

iv. Security executives

v. Maintain security of properties, personnel and information

vi. Looks into the arrival and departure of employees, punching, control of

shifts, allotment of gate passes and movement pass of worker, visitors pass

etc.

PERSONNEL

i. Matters connected with recruitment, career promotions, transfers and

posting, retirement and reservation guidelines concerning executives, staff

and workmen

ii. Design and implementation of HR policies

iii. Matters connected with annual performance, assessment report of all

employees and all development activities.

iv. Matters related to the appointment of employees, induction of

apprentices, appointment of trainees under company scheme, etc.

9. COMMERCIAL DEPARTMENT

a)Raw material store

The main function of the raw material store is to receive, store and issue goods

that are essential in the production of tyres .The raw materials are produced from

both local and international agencies .The natural rubber required is purchased

from local agencies. The steel beads wires required for the beads are supplied by

TATA.The processing oil is obtained by the Indian oil corporation .The carbon

black used is obtained from an agency in Karimugal.

The chemicals required for the rubber production includes sulphur, naptha, and

ammonium formaldehyde .These are ordered from countries such as China,

Thailand, and Russia.The placing of orders for the production requires a proper

coordination with other departments such as the production and marketing

department.

b) Engineering stores:

These stores are responsible for storing necessary spare parts, components

required for smooth functioning of the plant. It includes

1. General spares

2. Insurance spares

3. Furnace oil

4. Lubricants

5. Chemicals

6. Building Materials

On receipt of production department requirement the engineering stores

arranges for its release. The inventory management technique used in VED (Vital,

essential, and Desirable) analysis. A buffer stock is always maintained in the store.

c) Finished goods store: the main function of this store is to receive, store and

dispatch the goods. There are two dispatch centers, Replacement market and

Expert market. Their following go downs are used to store the finished goods .All

the finished goods .After their final inspections are kept till transferred as

required. Finished goods store has the function of receiving, storing and

dispatching as perm the supply chain management requirement and

communicating daily stock levels MIS to the Head office.

10. FINANCIAL SECTION:

Financial section of the ATL, which is concerned with the planning and controlling

of the firms financial resources .The divisional head controls the functions. The

duties include providing information to formulate accounting and costing policies,

preparation of financial reports and the direction of internal auditing budgeting.

The company has to maintain records including quantitative details and situation

of fixed assets.

Payroll section It involves the handling of wages, salaries; keeping records of

employees including information about their basic allowances, maintaining their

attendance etc for the convenience of employee .Payments are dispersed through

banks or ATM’s.

Costing The process of costing is based on the financial accounts. The price of a

single tyre is determined by taking into consideration, the actual cost involved in

making tyres. The company follows the rule of having only 0.5 or less percentage

of scrap. This helps minimizing loss.

Control It includes monitoring the electricity charges, wastages scrap and other

avoidable expenses .Distribution of payment though is a step also taken under

this function .This has helped in reducing manpower security requirements and

also other risks to be taken by the company. it maintains the minimum inventory

of 6-7 days ,as this is required for aging time of tyres.A total of 1.32 hours is

needed to make a tyre, make it heat resistant, strong, load resistant etc.

Control Excise ATL has to pay 16% excise duty for dutiable items for domestic

purposes to the Central Government .For exports no excise duty has to be

paid.ATL gives about 2-3 crore excise duty in spite of all these measures.

11.PURCHASE SECTION:

Apollo tyres is one of the main automobile tyres and tubes manufacturer in India.

Apollo sees vendors as strategic partners and constantly endeavors towards

building and strengthening long term relationships with its partners .The setup of

procurement functions in ATL is as follows:

1. Centralized procurement cell for raw material is based in the Head office

in Gurgaon

2. De centralized procurement cell for engineering spares

&consumables ,based at respective manufacturing location

The basic purchase items are:

1. Capital item purchase

2. Raw material purchase

3. Service purchase

4. Store purchase

KEY RESULT AREAS

About 78 % of the company’s revenues comes from the manufacture of H& LCV including tyres for the farm sector with no presence in the two and three wheeler segment. To boost its sales in the heavy vehicle segment it has tie-up’s with major players like Tata Motors, Ashok Leyland,Eicher, Mahindra and Punjab tractors.

FUTURE EXPANSION PLANS

ATL is setting up a green field project in chennai to expand its capacity from 850 MTPD to 1300 MTPD in FY 13. 380 MTPD of the incremental capacity will cater to radial tyres for the CV segment.With its agressive expansion plans globally , the company is in look out for core value driven companies and is in search for new markets outside India besides the current market reach of 70 countries.

CORPORATE SOCIAL RESPONSIBILITY

Apollo has recognized the importance of corporate social responsibility .It is a leading supporter of CSR , setting it apart as a perfect example of corporate citizenship . Apollo is pursuing business ethics through pragmatic stress on corporate governance.

Apollo’s thrust on CSR, includes programmes for women skill development, adult literacy classes, primary education programmes ,drinking water supplies and maintainance of village school buildings.The company goes forward with specific institutional programmes that have sustainability with predictable positive impact on the community that it serves

Apollo has allocated funds to set up medical clinics across he ountry, particularly in trucking hubs. The company is spending money on HIV/AIDS programmes, particularly targeted at the most vulnerable trucking community.

Conducting safe drive campaigns on the national express highways, which included checking the tyres for damages or wear patterns to ensure that they were safe for an expressway journey.

GREEN INITIATIVES

Enviornment protection programmes cover research on building “green tyres”,water recycling and conservation projects, use of solar energy and other alternate natural resources.

Wind energy project initiated with Suzlon Energy,has enabled tapping into 8 MW capacity of wind power, with an expected generation of around 1.70 million units of power every year.

Technology upgradation along with waste heat recovery has resulted in approximately 39,000 CER’s being granted by UNFCCC.

Dunlop, S.A has launched the “war on waste” campaign , a company – wide initiative to responsibly dispose all waste generated in factories and offices in an effective and enviornmentaly friendly manner.

Steam energy to replace use of RLNG under an agreement with GAIL . The project based on waste heat recovery system from GAIL’s gas turbines exhaust is conceived as a clean development mechanism(CDM) under KYOTO PROTOCOL.

SWOT ANALYSIS

STRENGTH

While taking fresh strides, Apollo Tyres has continued to maintain its lead in the market within the dominant segment of truck and bus tyres within the Indian tyre industry.

Quick response to changes in market conditions and product profiles has resulted in superior product innovation and technical expertise.

The company has an extensive distribution network in India ,South Africa and Netherlands.

Strong brand recall in a price sensitive Indian market.

Global quality standards, international processes and system certifications

Dynamic and progressive leadership, willing to implement change.

Global sourcing of raw materials.

Global presence with the acquisition of Dunlop Tyres and Vredestein Banden B V

Within its physical boundaries , the company propagates extensive use of information technology systems, so as to hasten the flow of information and leverage oppurtunities across its multiple locations .

WEAKNESS

Apollo has no presence in the two and three wheeler segments.

The capital intensive nature of the business in this segment also has its drawbacks.

OPPURTUNITIES

The government’s increased spending in road infrastructure in current budget gives ample oppurtunities for the company to capture the space of new vehicles on road with better infrastructure.

THREATS

1.Fluctuating price of raw-materials is a major concern.The price of major raw-material, especially natural rubber volatiles backed by the signals arising from international market.Besides there is an import duty on natural rubber at 20%.

2.There is a need for multi-brand strategy for all its four brands.(Apollo,Dunlop,Vredestein,Regal)

3.The industry faces tough competition from china. China’s emerging economy is backed by stimulus packages and government policies , making it more competitive at cost-levels.

4. Declining exports post recession puts pressure on company’s mission to achieve the target of US $ 2 billion company by 2010.

5. The Rupee appreciation against Euro, Dollar and Pound may affect the financials since the company exports to more than seventy countries.

OBSERVATIONS

Special attention given to its customers and keeps updated about the new features to be adopted based on customer needs.

Strong feedback from customers for products rendered.

Trade union activities are strong and there are frequent lock outs at the units.

Updated technology in line with global standards.

Strongly commited towards CSR and green initiatives undertaken are satisfactory.

Policies , strategies and procedures followed are satisfactory.

Conductive work experience.

Quality standards maintained .

SUGGESTIONS

Keeping in mind the companys mission to be a $ 2 billion company by 2010, the plant should be modernized and efficient machinery should be imported and commissioned replacing human labour wherever necessary.

Since the company puts forward aggressive production targets, proper relations should be maintained between the board and trade unions to tackle the frequent lock- outs at its units since it seriously affects the company’s top line.

The company must adopt more green initiatives with major thrust on clean and renewable energy for its power needs.

CONCLUSION

The growth of the tyre industry is dependent on economic growth, infrastructure development and also growth in the automobile industry which is cyclical in nature. Most of the raw materials are petroleum based and their prices are linked to the movement in crude oil prices. Natural rubber which is one of the major components of the total raw material cost is an agricultural product and is subject to price and production volatility resulting from speculative activities and natural causes. The inverted duty structure between tyres and natural rubber puts further pressure on the industry's revenue and profitability. The industry may also come under pressure if the radialisation level in the commercial vehicle segment increases faster than expected, necessitating larger investments.

The organization study at Apollo Tyres Limited was a great opportunityto gain first hand information about the functioning of the company. The study was very informative and the experience of working in the organization , interaction with the staff was very educating. The training measures employed are satisfactory. Following the rules and regulations and strictly maintaining discipline was also a great learning curve.