Tyre heavyweight, MRF plans to increase production by 20% in the next year to meet higher demand from export markets.
As reported by a leading business daily, Philip Eapen, MRF executive director (marketing) remarked, 'We propose to raise production by about 20% in the current financial year (ending September 2000) as part of our efforts to corner a larger chunk of the export market.'
MRF's brands have proved to be a success in international markets, and the company has already made forays in 65 countries. At Rs 1.5 bn, MRF's exports witnessed a 15% surge in FY99 over the previous year. For FY2000, the company has set itself an export target of about 25% of total production (20% of total production in FY99).
The company is now targeting West Asian, Latin American and African markets. It has become the approved supplier for 'Corsa' (of General Motors India) and plans to enter the global original equipment manufacturer (OEM) market in a big way.
As far as the local market is concerned, the company feels commercial vehicle (CV) demand needs to continue growing strongly over a period of time. Only then can domestic tyre demand be sustained at current levels. Currently tyre demand is being driven mainly by two-wheelers. Although auto demand has been on the upswing for quite some time, it has not translated into robust tyre demand.
For tyre demand to grow on a sustained basis, auto demand (especially CVs) will have to grow faster than at current levels. Only this will ensure that tyres can reap the benefits of the turnaround in auto demand.
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