Interview: MRF eyes big export potential: Arun Mammen

One of the largest tire manufacturing companies in the country is MRF Limited of Chennai which is one of the most expensive stocks in the country. Vice President and Managing Director of the Company Arun Mammen by shine jacob While talking to, he talked about the company’s growth strategy, export roadmap and concerns related to raw material prices. Edited excerpts from the conversation

MRF is growing in double digits quarter on quarter. Similarly, we have become the 11th largest tire company in the world. Last year we were at 15th position but now we have climbed four places. MRF is India’s largest tire company. We are growing in all categories whether it is trucks, two-wheelers or cars. Most importantly, our original equipment (OE) fitments are also picking up pace. This is the reason why our share in the country’s market is increasing.

We move according to the market and if the market requires then we expand. We are here to capitalize on any potential growth opportunity. Last year our revenue was Rs 25,000 crore. We will not be able to give any kind of estimate because many things are changing. All I can say is that we are moving forward with double digit growth.

We are confident that we can maintain this growth momentum in the near future. Our capital expenditure in the last financial year was around Rs 2,100 crore. Our capital expenditure in the first six months this year was Rs 700 crore. We will do something else as per the need seen in the market.

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The era of electric vehicles will continue. We have the largest fitment of electric vehicles. Be it Tata Motors or the new Maruti Suzuki or whatever new launches under Bharat Mobility are all MRF EV tyres. Even in terms of SUVs, we are the biggest player in this segment.

The price of crude oil is now 81 dollars per barrel and the rupee went to the level of 86.5 against the dollar. All these things increase the prices of raw materials. A major part of the raw materials in our industry is imported. All these things affect the cost. It is too early to say whether prices will increase or not but there will definitely be an impact on costs. The prices of crude oil or rubber have a direct impact on our profits.

For many years our emphasis has not been on exports. Now we have access to the world market and the demand for our products is increasing, hence the business is also increasing. We are increasing exports at the rate of 25 percent every quarter. We will seize some opportunities when the rupee-dollar exchange rate becomes favourable. Exports will be an important factor going forward. We have a strong position in Southeast Asia and our performance is also better in Africa and we have started exporting to South America. Our emphasis is on all these markets.

At present, our emphasis is on what we are doing. Our main business is related to tyres. We are expanding our scope in paint industry, toys, funskool brand. Instead of selling in the country, Funskool exports more to Europe, Australia and America. We sell to Walmart, Target and other brands. We have toy manufacturers all over the world and we do contract manufacturing.

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