Modi Rubber banks on exports to fight slowdown

V K Modi-promoted Modi Rubber, which re-started tyre production after a gap of eight years in June through its subsidiary, Modi Tyre Company, has started exporting truck tyres to Bangladesh and Afghanistan, since the domestic market is picking up at a slow pace. The company is eyeing more exports to countries like Sri Lanka and Myanmar till the growth of sales becomes better in the domestic market.

“Though margins in the export market are not as good as in domestic sales, we are exploring export opportunities till the domestic demand for our product picks up,” the company’s Director Alok Modi said, adding that on achieving full capacity utilisation, the company hopes to export 15-20 per cent of the annual produce.

Prior to its closure in 2001, the company used to export 25-30 per cent of its annual production of 1.1 million units. The Meerut plant in Uttar Pradesh is currently operating at 50 per cent capacity.

“The product is being well accepted in the market. We aim to achieve 100 per cent capacity in a month’s time and produce 95,000 tyres every month,” he said.

The company has now got 70 carrying and forwarding agents across seven states and a network of 350 dealers. It plans to gradually expand the dealership network to 1,300.

Tyres manufactured by Modi Rubber are being marketed under the Continental brand name, as it has entered into a new technical and branding joint venture with the German tyre-maker.

The earlier tie-up with Continental, which is the world’s fourth-largest tyre-producing company, had lapsed after the closure of the plant in 2001.

Family disputes, financial problems and labour unrest had led to the closure of the unit. Prior to 2001, Modi Rubber was a leading tyre company with a market share of more than 14 per cent. The company was declared sick and had to go to the Board for Industrial and Financial Reconstruction (BIFR). It is now getting back on track according to a rehabilitation scheme finalised by the BIFR.