Rubber auto-parts makers to venture into agri, industrial areas

Units focus on developing products for construction equipment and industries to mitigate risk

Rubber-based auto-component makers are working on developing products that would cater to the earth-moving and agricultural segments, to offset the slow demand from the passenger vehicle segment. Some are also looking diversifying their portfolio to industrial applications in order to mitigate risks of demand fluctuations.

On top of it, the cooling off of natural rubber prices in the last three to four quarters would help these units boost their margins further. Dhananjay Kadepurkar, vice president, sales and marketing of Innova Rubbers, a Nashik-based rubber auto-component maker, said "We are trying to focus on the non-passenger vehicle segments like construction equipment, earth-moving vehicles, as well as the agricultural segment (tractors etc). This would help us de-risk our business as the passenger vehicle industry has been in a slow lane for the last couple of years, and demand so far this year has also been flat."

Some units have already started implementing the same. Faridabad-based Bony Polymers which makes synthetic rubber-based components for the automotive sector has started developing products for earth-moving equipment around a year back. "We have started developing some products for JCB around a year back," said Jatinder Pahwa, marketing head of Bony Polymers. The company, which had a clientele among two-wheeler makers, had not been affected much by the slowdown in the passenger vehicle segment as such, but has already taken steps to ensure sustainability of business operations. "Around 45 per cent of our sales come from the two-wheeler segment, around 20 per cent from the passenger vehicle segment, and the remaining comes from the agricultural segment. We have also started increasing our focus on the earth-moving vehicles, and expect revenues to improve from the segment," Pahwa explained.

Kadepurkar further added that at least 15-20 per cent of the Maharashtra based units have started looking at diversifying their product portfolio. "There are around 150 odd units that make rubber-based products for the automotive industry, and a significant number have now started looking at developing products that would cater to different industry segments," he said. Maharashtra is considered a hub for rubber based auto-component makers.

In Gujarat, the auto-component hub of Rajkot has around 10-15 such units. Rajesh D Kothari, CEO & managing director of Ashutosh Rubber private ltd, a Rajkot based unit said that it was focussing on supplying more to three-wheeler makers like Atul Auto rather than the passenger vehicle industry. His company also has a product line up for industrial usage.

A senior official of the Automotive Component Manufacturers Association said that many of its members are looking at diversification, however, with a slowdown in the business environment, there is also a challenge of paucity of funds to put into product development and marketing initiatives.