Apollo Tyres is one of the largest tyre manufacturing companies in India.

The company was incorporated in 1972 and commenced its production in 1977. It was the first company to receive ISO9001 accreditation in Indian tyre industry. The company can be traced back to the 70s when hard-nosed MNCs and Indian tyre major dominated the tyre industry. Apollo set up its very first manufacturing unit in Perambra, Kerala in 1977, with a very huge production capacity of 185 tonnes. It was in 1982, that Apollo formulated and put into action a series of pragmatic project generating policies that led towards a turn around. Apollo Tyres Ltd. is the leading Indian tyre manufacturing with annual revenues of over US $ 1 billion. In fact it is the first Indian tyre company to reach this milestone. In 2006, Apollo acquired Dunlop Tyres of South Africa. The company has its operations in India, South Africa and Zimbabwe with a network of over 4,000 dealerships in India alone. Sometime in January, the company also announced its plans to start its operations in Hungary. A dynamic new management team under the leadership of Vice-Chairman and MD, Mr. Onkar S Kanwar took over the helm of the company affairs. The objectives were redefined with emphasis growth through quality product and services, aggressive market penetration and expense containment. In 1984 Apollo tyres Ltd wips out entire accumulated loss even posted a project of Rs57 Lakhs BIFR banded over premier tyres Ltd (the plant is situated at Kalamassery near Cochin) to Apollo Tyres Ltd on the 17th April 1955and products are being made in Apollo brand name with this achievement the company has expected its management base to emerge as the No. 1 tyre company in India. In 95-96 Apollo clocked a turnover of Rs.1250 crores.

My project at Apollo tyres ltd. Kalamassery in Cochin is a humble effort to understand and comprehend its organization. The project is intended to access and to acquire the knowledge regarding the functional as well as the management aspect of the firm. ATL Perambra Unit is the mother plant of Apollo family It is the single largest truck tyre plant in India Fastest growing plant in Apollo Family 7th fastest growing tyre company in the world First tyre company to obtain ISO 9001 certification Present production capacity of 307 MT/ day

It has nearly 2700 employees Four different trade unions

Infrastructural Facilities Kalamassery Plant (Kochi)

Apollo Tyres first manufacturing unit located in Perambra in Kerala and began its commercial production in 1977 with a capacity of 54 tonnes. Currently the production capacity is 245 tonnes a day. It is manufacturing truck, LCV, tractor tyres. The plant is having following certifications: QS -9000: 1998,2004 certifications for Quality Management Systems Registered with DGS&D and Defence (CQAV) Registered with DOT (Department of Transportation, USA) ECE Certification In-Metro (Brazil) Certification SASO (Saudi Arabia) Certification ISO 9001 Certification Initial capacity of the Plant : 49 tonnes per day

Existing capacity of the Plant: 300 tonnes per day Number of People :2416(including contract employees) Apollo Tyres Ltd. Perambra unit was ranked the first among large scale industries for productivity and energy conservation in the year 2002-2003 by Kerala state in year 2005 & 2007 at productivity council

BANKS OF THE COMPANY

State Bank of India Bank of India Bank of Baroda Punjab National Bank State Bank of Mysore State Bank of Patiala State Bank of Travancore ICICI Bank Ltd

Union Bank of India

MILESTONES OF APOLLO TYRES

1972 1974 1975 1976 1977 1982 1991 1995 2000 2003 2004 2005 2006 2007 2007 2007 2008 2009 The company's license was obtained by Mr Mathew T Marattukalam, Jacob Thomas and his associates. The company was taken over by Dr. Raunaq Singh and his associates. April 13, Perambra Plant Foundation stone was laid down. Apollo Tyre Ltd. was registered. Plant commissioned in Kerala with 49 TPD capacity. Manufacturing of Passenger Car Radial Tyre in Kerala. The second plant commissioned in Baroda. Acquired Premier Tyre Ltd. in Kerala. Exclusive Radial capacity established at Baroda. Radial Capacity expanded to 6600 tyre per day. November 17, JointVenture with Michelin. Launch of Apollo Acelere- 'H' Speed Rated Car Radials. April 13, Perambra Plant completes 30 Years. January 30, Dunlop South Africa is acquired. Launch Dura Tyre (Retarded Tyre) for the first time in India Launch Regal truck and bus radial tyres Launch Apollo Tennis Initiative & Mission 2018 Announce public Greenfield plant to be ready by 2010 for the European markets Announce the acquisition of VBBV Tyres , Netherlands

CHAPTER 7 PORTERS FIVE FORCES ANALYSIS

A MODEL FOR INDUSTRY ANALYSIS:

Porter's five forces analysis is a framework for the industry analysis and business strategy development developed by Michael E. Porter of Harvard Business School in 1979. It uses concepts developed in Industrial Organization (IO) economics to derive five forces which determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one where the combination of forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition". The model of the Five Competitive Forces was developed by Michael E. Porter in his book Competitive Strategy: Techniques for Analyzing Industries and Competitors in 1980. Since that time it has become an important tool for analyzing an organizations industry structure in strategic processes. Porters model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should base on and understanding of industry structures and the way they change. Porter has identified five competitive forces that shape every industry and every market. These forces determine the intensity of competition and hence the profitability and attractiveness of an

industry. The objective of corporate strategy should be to modify these competitive forces in a way that improves the position of the organization. Porters model supports analysis of the driving forces in an industry. Based on the information derived from the Five Forces Analysis, management can decide how to influence or to exploit particular characteristics of their industry.

The Five Competitive Forces

The Five Competitive Forces are typically described as follows: Bargaining Power of Suppliers The term 'suppliers' comprises all sources for inputs that are needed in order to provide goods or services. Supplier bargaining power is likely to be high when: The market is dominated by a few large suppliers like MRF, JK Tyres rather than a

fragmented source of supply. There are no substitutes for the particular input. The suppliers customers are fragmented, so their bargaining power is low. The switching costs from one supplier to another are high. There is the possibility of the supplier integrating forwards in order to obtain higher prices

and margins. The buying industry has a higher profitability than the supplying industry.

The buying industry (automobile) hinders the supplying industry in their development (e.g.

reluctance to accept new releases of Tyres), The buying industry has low barriers to entry. In such situations, the buying industry often faces a high pressure on margins from their suppliers. The relationship to powerful suppliers can potentially reduce strategic options for the organization. Bargaining Power of Customers Similarly, the bargaining power of customers determines how much customers can impose pressure on margins and volumes. Customers bargaining power is likely to be high when They buy large volumes; there is a concentration of buyers. The supplying industry comprises a large number of small operators. The supplying industry operates with high fixed costs. The product is undifferentiated and can be replaces by substitutes. Switching to an alternative product is relatively simple and is not related to high costs. Customers have low margins and are price-sensitive. The customer knows about the production costs of the product. Threat of New Entrants The competition in an industry will be the higher; the easier it is for other companies to enter this industry. In such a situation, new entrants could change major determinants of the market environment (e.g. market shares, prices, customer loyalty) at any time. There is always a latent pressure for reaction and adjustment for existing players in this industry.

The threat of new entries will depend on the extent to which there are barriers to entry. These are typically Economies of scale (minimum size requirements for profitable operations). High initial investments and fixed costs.

Cost advantages of existing players due to experience curve effects of operation with fully depreciated assets. Brand loyalty of customers. Protected intellectual property like patents, licenses etc. Scarcity of important resources, e.g. qualified expert staff. Access to raw materials is controlled by existing players. Distribution channels are controlled by existing players. Existing players have close customer relations, e.g. from long-term service contracts. High switching costs for customers. Legislation and government action.

Threat of Substitutes: A threat from substitutes exists if there are alternative products with lower prices of better performance parameters for the same purpose. They could potentially attract a significant proportion of market volume and hence reduce the potential sales volume for existing players. This category also relates to complementary products. Similarly to the threat of new entrants, the treat of substitutes is determined by factors like Brand loyalty of customers. Close customer relationships. Switching costs for customers. The relative price for performance of substitutes. Current trends.

Competitive Rivalry between Existing Players This force describes the intensity of competition between existing players (companies) in an industry. High competitive pressure results in pressure on prices, margins, and hence, on profitability for every single company in the industry. Competition between existing players is likely to be high when There are many players of about the same size. Players have similar strategies.

There is not much differentiation between players and their products, hence, there is much price competition. Low market growth rates (growth of a particular company is possible only at the expense of a competitor).

Diagram of Porter's 5 Forces SUPPLIER POWER Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry

BARRIERS TO ENTRY Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation Proprietary products BUYER POWER Bargaining leverage Buyer volume Buyer information Brand identity Price sensitivity Threat of backward integration Product differentiation Buyer concentration vs. industry Substitutes available Buyers' incentives

THREAT OF SUBSTITUTES -Switching costs -Buyer inclination to substitute -Priceperformance trade-off of substitutes DEGREE OF RIVALRY -Exit barriers -Industry concentration -Fixed costs/Value added -Industry growth -Intermittent overcapacity -Product differences -Switching costs -Brand identity -Diversity of rivals -Corporate stakes

(Chart no 7.1)

CHAPTERISATION
Chapter 1 Introduction Objectives, Scope of the study, Methodology, Sources of data, Limitation of the study, chapterisation Chapter 2 Industry Profile History of tyre industry World scenario, Indian Scenario, State Scenario, Global position of Apollo Tyres. Chapter 3

Company Profile Organisational goal, History of company, Companys vision, Companys Mission, Objectives of company, corporate social responsibility, Achievements, Banks of the company. Product Profile Truck, Light commercial vehicles, Passenger car radials, Farm. Market Profile MRF, APOLLO TYRES, JK industries, CEAT, GOODYEAR INDIA Chapter 4 Organisational Structure Organisational chart Chapter 5 Analysis of functional departments Chapter 6 SWOT Analysis Companys Strength, Weakness, Opportunities & Threats are explained. Chapter 7 Porters five force in Apollo Chapter 8 Findings, conclusion & suggestions Bibliography Appendix HIV-AIDS initiative is the biggest an most comprehensive programs at Apollo. The organization recognizes it as a development and workplace issue and has a detailed action plan covering key stakeholders. Apollo Tyres Health Care Clinics (for customers i.e. truckers) have been established in and around cities like Uttar Pradesh, TamilNadu, Maharashtra, Rajasthan, New Delhi, and other large transportation hubs in India. Run by qualified doctors, counsellors, pharmacists, and outreach workers, the Clinics focus on diagnosis and treatment of sexually transmitted diseases, condom promotion and effective communication to promote behavioural change- Workplace programs (employee) in India and SA. Training and leveraging supply chain in taking the message forward in line with Apollo Tyres commitment to capacity building. Sample surveys

were also carried out to record the knowledge, attitude, behaviour and practices. Emergency Medical Services (EMS) around our manufacturing locations in India. Established highway rescue project in Gujarat and city EMS in

Vadodara Plan to launch in Kerala. Health Camps & Medical assistance in the villages surrounding the manufacturing location generate awareness about deadly diseases like HIV/AIDS, Malaria, TB, Chickengunia, etc. Health camps on HIV/AIDS, TB and Malaria are panned for truckers in the Highway regions as well as in the remote villages. Provision of artificial limbs to war wounded soldiers. Adult Literacy classes for villages. Skill development for women in villages with a view to making them self sustained members of the community. Tailoring classes are arranged on an ongoing basis and an Anganwadi (crche) was also provided to take care of the children from economically underprivileged families. Primary education in keeping with Millennium Development Goal in the villages involved awarding scholarships to support bright students from economically backward sections of society. Maintenance of school building in the villages. Provision of computers to the schools in the villages. Provision of water tank for the village as well as laying a pipe line to bring supply of drinking water for the 500 students of the Government Girls High School, Kodakara, Perambra. Opportunity of self employment / entrepreneurships to war wounded soldiers resulting in revenue generation for them and the organization. Customer promotion on safe drive environment Conducting Safe Drive Campaign on the national expressways, which included checking the tyres for damages or wear patterns to ensure that they were safe for an expressway journey. Customers were also given Safe Drive booklets. 20 such Safe Drive campaigns have already taken place across the country this year. Twenty more are planned.

Wind Energy project initiated six months back along with Suzlon, has enabled tapping in to a 8 Megawatt Capacity of wind power, with an expected generation of approximately 1.70 million units of power every year.

Technology Up gradation along with waste heat recovery has resulted in approximately 39,000 CERs being granted by UNFCCC. Dunlop, South Africa 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 environment friendly manner.

Steam energy to replace use of RLNG under an agreement with GAIL. The project, based on Waste Heat Recovery System from GAILs Gas Turbines exhaust, is conceived as a Clean Development Mechanism (CDM) project under Kyoto Protocol. This initiative would enable Apollo Tyres to generate 4 MW of power and allow the two companies to save around 935 Million Kilo Calories of energy in producing process steam, thereby also avoiding formation of 55,000 tonnes of CO per 2 annum. Activities are continuously redesigned and shaped to suit the dynamic requirement of

various programs. Some activities will need to be managed through expert NGOs. For the future, Apollo Tyres aims to further develop its alliances with the business community, educational institutions, social organizations and community gatherings to spread awareness and take action.

CHAPTER - 8 FINDINGS AND SUGGESTIONS

FINDINGS
ATL is the first tyre company to receive ISO 9001 certification and one the few tyre manufactures to obtain QS 9000 certification. Workers health and safety are given prime importance A good co-ordination exists between different departments. Trade unions play vital role as bargaining agents. The management is sometimes forced to accept demands made by the unions. The products of the company are known for its high quality standards. The workers are not completely satisfied with the wages they are paid. Employees are provided with facilities such as subsidized canteen, transportation etc. Safety posters and slogans are exhibited inside the plant and various safety awareness programs are also conducted. The factory premises are kept clean which comes under a dedicated system known as Environment Management System (EMS) Factory is located at an ideal location that allows easy access to land, air and sea transportation. All departments at the plant are being connected through SAP which gives real time connectivity with each other.

All the plants of Apollo tyre group are being connected with the head quarters through WAN and SAP which critical decision making easy.

SUGGESTIONS Maintain the relationship between employees and employers There should be training program for better understanding of SAP A bit more promotional activities could enhance building brand image Maintain a healthy relationship with trade unions More training facilities must be given to employees The company should enter into two/three wheeler markets. The company should invest more on advertisement. Each should have an in house marketing department that can take care of the local fluctuations in market.

CONCLUSION
Apollo tyres Ltd is the 7th fastest growing tyre company in the world. A fair wage system prevails in ATL. The company provides better working condition for employees. Proper training to workers and efficiency of the workers must be increase to increase production. The industrial relation with the local union is fairly good. The company is facing a cut throat competition in Indian market and international market. Despite of all these challengers Apollo has done well in the past and with a booming economy and a focused progressive leadership at the top. The employees enjoy working as a team and with customers to create superior and distinct production and services. Apollo is focused on fast and flexible, never ending improvement in order to create an enterprise that is dynamic, ever expanding and profitable

and in constant pursuit of customer satisfaction is Apollo policy to design, manufacture and service our products to provide the level of quality and value that meets ever customer needs. Apollo stands first in the production of truck tyres. In spite of recession the company is still making sufficient profit. There are good working conditions and industrial harmony among the employees. Proper and adequate training is given to the employees, which leads to higher productivity,. The company is facing cutthroat competition from Indian market as well as foreign market. In spite of fierce competition and local problems the Perambra plant thrives and move forward to its target of 310 MT/day and thereby achieve their 9000 crore goal by the end of 2010. Apollo tyres boast a vibrant and dynamic, profession and non hierarchical culture. Transparency and communication are cornerstones of corporate practice, across levels, to ensure that each individual employee is aligned with the goals and aspiration of the company. At Apollo Tyres the three corporate pillars of People, Quality and Technology underpin all activities and processes. These are the companys stated areas of corporate excellence, in its journey towards becoming a best in class global manufacturer. Apollo Tyres, they are always looking out for new opportunities. If opportunities do not come their way, they go ahead and create opportunities. Over the years they have created opportunities for growth, opportunities for success and also opportunities for a bright future.

APPENDIX

PROFIT AND LOSS ACCOUNT OF APOLLO TYRES

Sl. No Particulars

Year ended 31.03.2009

Year ended 31.03.2008

1. Gross sales/Income from operations

45,496.32

42,469.83

2.Other Income Total

112.47 45,608.79

92.23 42,562.06

3.Total Expenditure a) Decrease/ (Increase) in work in progress & Finished Goods b) Consumption of Raw Materials c) Staff cost d) Excise Duty e) Other Expenses Total 4. Operating Profit 5. Interest 6. Depreciation 7. Profit before Tax 8. Provision for Tax -Current -Deferred -Fringe Benefit Tax 439.30 148.67 42.50 975.01 121.43 45.00 42,248.64 3,360.15 668.43 980.07 1,711.65 37,829.08 4,732.98 520.41 878.10 3,334.47 265.86 27,946.64 2,075.46 4,791.91 7,168.77 (552.74) 23,849.60 2,270.55 5,530.56 6,731.11

9.Net Profit

1,081.18

2,193.03

BALANCE SHEET

PARTICULARS

Mar 09

Mar 08

Mar 07

Mar 06

Mar05

Apollo Tyres Ltd SOURCES OF FUNDS : Share Capital Reserves Total Total Shareholders Funds Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF FUNDS : Gross Block Less : Accumulated Depreciation Less:Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liabilities

50.41 1,305.30 1,355.71 462.39 233.13 695.52 2,051.23 1,838.00 694.66 1,143.34 281.41 297.45

48.85 1,180.00 1,228.85 223.14 237.51 460.65 1,689.50 1,569.78 598.78 971.00 94.41 302.71

46.41 920.71 967.12 473.76 144.94 618.70 1,585.82 1,492.51 541.66 950.85 80.46 258.11

38.34 595.68 634.02 381.00 369.00 750.00 1,384.02 1,310.61 469.94 840.67 77.93 0.53

38.34 538.40 576.74 348.75 195.06 543.81 1,120.55 1,148.43 398.30 750.13 84.33 54.48

417.05 87.28 340.60 195.77 1,040.70

513.29 155.13 265.85 191.53 1,125.80

451.95 203.06 172.00 441.37 1,268.38

419.41 175.14 231.36 370.18 1,196.09

330.12 156.52 110.43 305.72 902.79

460.13 95.63 555.76 484.94 0.15 10.96 167.02 -156.06 2,051.23 282.85

565.83 93.08 658.91 466.89 0.26 11.29 152.49 -141.20 1,694.07 223.56

542.20 289.12 831.32 437.06 0.12 10.38 139.44 -129.06 1,597.54 115.27

388.62 237.63 626.25 569.84 0.26 8.49 113.70 -105.21 1,384.02 69.73

380.14 188.07 568.21 334.58 0.38 2.26 105.61 -103.35 1,120.55 74.29