Apollo Tyres

I read a great article on Apollo Tyres recently. Probably like many readers of this blog, I had never heard of Apollo, however I did know of their subsidiaries in Europe and Africa, notably Vredestein (a Dutch company) and the southern African portion of Dunlop which they spun off in 2013. I know that my readers from India will certainly know Apollo!

Apollo Tyres was founded in 1972 in Kerala, India and has been expanding such that it is now the 17th largest tyre company in the world and it wants to expand further and break into the top 10. It currently has four factories in India, two in southern Africa and one in the Netherlands (Vredestein).

It bought Vredestein in 2009 from a group of Dutch investors who in turn had bought it from a foundation that was set up to protect it after several years of joint ownership by the Dutch Government and BF Goodrich. A strange fact is that Vredestein uses the designer Guigiaro (famous for Italian supercars) to design their tyres!

This purchase allowed Apollo to follow other Indian companies to expand into Europe and to get their products into a much wider market. There was a similar strategic plan behind the recent purchase of Pirelli by ChemChina. Apollo now has five major brands: Apollo, Kaizen, Maloya, Regal and Vredestein covering all types of tyres for passenger and commercial vehicles as well as construction machines.

One factor in the success of Apollo is their operational efficiencies which reduces costly waste and improves the performance of its factories. The company has adopted the Japanese Kaizen methodology which focuses on small improvements being continuously made in the factories. Kaizen also focuses on the factory floor giving the workers the ability to figure out the improvements and to work with management to implement them. Apollo was able to dramatically improve the efficiency of Vredestein which reduced costs and increased profits on each tyre sold.

Kaizen has been adopted so well that the company encourages ideas by holding competitions and presenting trophies in all their factories. This is something that many companies could use as a great example for their own change management!

So Apollo has reduced its waste to below the industry norm of 1% and is working to replicate its processes in all of its plants. It even developed a Sustainability Report to define how it could reduce its usage of natural products – seems unusual when rubber is a natural product, however there is sense here, they want to make more products from the resources they have. The report also stretches to energy and water usage and even health and safety aspects of the factories.

The article I read commented on the quietness of some of their factories – a clear heath and safety issue that has been addressed. The great thing here is that all of their factories are benefiting from this report and this will also spread to the new factory they plan to open in a couple of years in Hungary. There is even a suggestion that South East Asia has capacity for an Apollo factory and you can be sure that this one will also be a highly efficient plant when it gets built.