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Welcome
toBusiness Sensitization
Workshopfor
Union officer bearersand
DR·s
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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
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Your Contribution
Just outstanding
and
Marvelous !!!
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Thank you !!!
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Apollo Journey from 1991-2010
Key Achievements
1991 : Bias plant started
2000 : Radial plant started
2009 : IMS certification
2007 - 2010 : Mfg Excellence Awards : Limda Bias2007 - 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
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Apollo·s
Contribution
In
Lif e !!!
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Apollo·s Contribution in Life !!!
Where we were ?
Vs
Where we are today ?
Progress from Individual to family
Identity changed
Societal status ² reputation and credibility
Emotional development Economic capability-Wealth generation
Living standard -uplifted
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Understanding
of
Business Cycle
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Understanding of Business cycle
Four Stages of Business
Stage :1 : Start-up/Creation
Stage :2 : Growth
Stage :3 : Maturity
Stage :4 : Recession/Decline
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Liberalizations, Privatization
Globalization
and
it·s impact on Business
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LPG and it·s impact on Business
Need for Liberalization/Privatization/globalization :
In 1980·s Indian Economic was based on government control and acentrally operated market.
No consumer oriented market and foreign investments
Economic condition of country was poor and standard of living didn·t goup
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
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Recession
and
it·s impact on Business
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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
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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
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Current Business Scenario
(Tyre Industry)
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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.
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Apollo, 16%
MRF, 24%
JK, 20%
Ceat, 3%
Goodyear, 13%
Bridgestone, 20%
Others, 3%
Current Business Scenario (Tyre Industry)
Competitive Scenario
Truck and Bus Tyres
Apollo, 27%
MRF, 22%JK, 20%
Ceat, 14%
Birla, 15%
Others, 3%
Light Truck Tyres
Apollo, 28%
MRF, 22%JK, 19%
Ceat, 7%
Birla, 4%
Others, 19%
PCR Tyres
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Business Challenges
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K ey Business Challenges
Hikes in Raw Material prices ( Constitutes 75% of production cost)
Natural Rubber Cost
Difficult to pass on increased RM Cost to Customer
115.91
179.42
108.6797.47
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00
200.00
Price (Rs/kg) 97.47 108.67 115.91 179.42
2007-08 2008-09 2009-10 2010-11
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Fuel Cost
24 24.5
23.5821.86
0.00
10.00
20.00
30.00
Price 21.86 23.58 24 24.5
2007-08 2008-09 2009-10 2010-11
K ey Business Challenges
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Power Cost/kwh
7.07 7.1
7.04
5.84
0.00
2.00
4.00
6.00
8.00
10.00
Price 5.84 7.04 7.07 7.1
2007-08 2008-09 2009-10 2010-11
K ey Business Challenges
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Rs/kg (Bias)
12.92 12.9912.89
11.9
0.00
5.00
10.00
15.00
Rs/kg(Total) 11.9 12.89 12.92 12.99
2007-08 2008-09 2009-10 2010-11
K ey Business Challenges
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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 ishappening 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%
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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 thecountry
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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
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Your role as a Business Partner
Union le
aders
and
DR¶s s
hould :
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 productivityimprovement.
Take a lead and encourage workmen to participate in Quality and safetyinitiatives
Ensure healthy and harmonious relationship between union and Mgt
Be a Role Model for others
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Case study
Companies f aced challenges, survived and grew:
Bajaj auto Ltd.
KEC Ltd.
TATA
Companies could not f aced challenges and demolished:
Premier Auto Mobile (FIAT)
Mafatlal group
Sarabhai group
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Case studyInnovative 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 inManpower
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Principles of KARMA
The Art of Living life by way of
God K rishna
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Thank U
Sun Never Set !!
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