Magazine for the professional tire industry
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News/views When David buys Goliath What are Apollo's plans for Cooper Tire in the U.S.? When a smaller company purchases a larger comcompanies is to continue to delight the customers pany, it is only natural to wonder why it wasn't the and offer the full suite of products across a basket other way around. That question was on the minds of brands offering value across price points. of many when Apollo Tyres Ltd., a $2.4 billion tire company, agreed to acquire Cooper Tire & Rubber MTD: Do you have plans to sell Apollo passenger Co., a $4.2 billion company. and light truck tires in the United States? Cooper wasn't looking to acquire an Indian comKanwar: It is too early to comment on any such pany, according to Chairman, plans, which would be worked CEO and President Roy Armes. upon during the integration pro"We were looking to understand cess. The idea is to supplement more about that market through the current product mix and plug our (existing) relationship with in gaps in segments where CooApollo." per currently does not have a Apollo, though, was followproduct. I think with our 30-plus ing through on the aggressive years experience in commercial fve-year plan it put into action vehicle tire technology and our in 2011. Logically, it was the global OEM relationships, Apollo only way to become a top 10 tire can make a signifcant impact manufacturer so quickly. on Cooper's evolution in the When Apollo announced it North American market. was borrowing the $2.5 billion purchase price, more questions MTD: Do you plan to produce were raised. Vredestein and/or Apollo pasNeeraj Kanwar, vice chairman "I believe there is tremendous opportuni- senger and light truck tires and managing director, says the in Cooper's North American ty for Cooper branded products in India," leveraged debt will not be a prob- says Neeraj Kanwar, who runs the complants? If yes, will you have to pany with his father, Onkar S. Kanwar, lem. "We believe this transaction chairman and managing director. increase capacity to do so? has been fnanced in a prudent Kanwar: We have always manner and fully supported by our lenders. They see placed extremely high importance on having prothe fnancial and the strategic impact of the deal." duction capabilities within close proximity to the It won't change the way the combined company markets being served and the combined entity's goes to market, either. "I don't see how the debt will manufacturing footprint will support that philosophy affect Cooper or Apollo's way of doing business in in the U.S. and beyond. In the long term, we will the various markets," he says. "It will be business evaluate the best combination of products and as usual for both companies." relationships for all our factories to ensure that we In this exclusive interview with Kanwar, Modern see robust growth in all geographies and serve the Tire Dealer defnes what "business as usual" means customer in the best possible way. from Apollo's perspective. MTD: Do you have any plans to build a tire plant in MTD: In fscal year 2012, you commenced a fveNorth America? year growth plan to become a top 10 tire manufacKanwar: Our hands are already full with this turer. You were the 16th largest tire manufacturer acquisition and the related integration process; and, based on sales at the time, and will be ranked the if necessary, we might look at increasing the capaciseventh largest when the purchase of Cooper is ties of existing facilities, rather than building a new completed. How does the acquisition affect your one. — Bob Ulrich fve-year plan? Kanwar: While the larger focus is to integrate Does Kanwar believe selling tires in India is the the two companies and to realize the synergies of same as selling tires in the U.S.? Find out by reading the joint entity, the key theme underpinning both the full interview on www.moderntiredealer.com. 8 MTD August 2013