KRUPA Falcon Tyre Project
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Falcon Tyres Limited
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Falcon Tyres Limited
INTRODUCTION
In India, tyre industry has seen a major revolution due to spurt in Automobile sector. The tyre industry is a raw material intensive industry. Raw materials accounts for about a 55% of the total production cost. Two of the 4 major raw materials used in tyre tyre mark marketi eting ng (i.e (i.e.. Nylo Nylon n tyre tyre cord cord and and synt synthe heti ticc rubb rubbet et)) are are petro petrole leum um base based d derivatives. In India the ratio of Synthetic rubber to natural rubber in the profile of raw material consumption is approximately 20:80, which stands in sharp contrast to the ratio if 70:30 for developed countries. Natural rubber is more resistant and is therefore more suitable to Indian road conditions.
The Indian tyre industry is made up of 16 major players and 13 minor players, which amounts to Rs. 9000 crores business. There are more than 34 plants located all over India. This industry depends on the agricultural and industrial performance of the economy, transportation and production of vehicles.
MAJOR KINDS OF RAW MATERIALS USED IN TYRE INDUSTRY: The major raw materials and their weight age in the total raw materials cost structure are:
1. NATU NATURA RAL L RUBB RUBBER ER::
It is the most important raw material used in the manufacture of tyres. Natural rubber accounts for about 40% (by weight) of the total raw material requirement in the manufacture of a tyre. The productivity of natural rubber in India is highest in the world, but still India face shortage of natural rubber produced in the country.
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Falcon Tyres Limited
INTRODUCTION
In India, tyre industry has seen a major revolution due to spurt in Automobile sector. The tyre industry is a raw material intensive industry. Raw materials accounts for about a 55% of the total production cost. Two of the 4 major raw materials used in tyre tyre mark marketi eting ng (i.e (i.e.. Nylo Nylon n tyre tyre cord cord and and synt synthe heti ticc rubb rubbet et)) are are petro petrole leum um base based d derivatives. In India the ratio of Synthetic rubber to natural rubber in the profile of raw material consumption is approximately 20:80, which stands in sharp contrast to the ratio if 70:30 for developed countries. Natural rubber is more resistant and is therefore more suitable to Indian road conditions.
The Indian tyre industry is made up of 16 major players and 13 minor players, which amounts to Rs. 9000 crores business. There are more than 34 plants located all over India. This industry depends on the agricultural and industrial performance of the economy, transportation and production of vehicles.
MAJOR KINDS OF RAW MATERIALS USED IN TYRE INDUSTRY: The major raw materials and their weight age in the total raw materials cost structure are:
1. NATU NATURA RAL L RUBB RUBBER ER::
It is the most important raw material used in the manufacture of tyres. Natural rubber accounts for about 40% (by weight) of the total raw material requirement in the manufacture of a tyre. The productivity of natural rubber in India is highest in the world, but still India face shortage of natural rubber produced in the country.
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Falcon Tyres Limited
2. SYNTHE SYNTHETIC TIC BUTA BUTADIE DIENCE NCE RUBB RUBBER: ER:
It is one of the major kinds of raw materials. It contains three types of rubber namely:
a. Styrene Rubber:
It is manufactured from petroleum feed stock. It is used in Car, Jeep. Tyre industry alone consumes about 50% of total quality of this kind of rubber.
b. Poly Butadiene Rubber:
It is manufactured from petroleum feed stock. It is mainly used in heavy duty tyres. Tyre industry consumes 80% of total rubber.
c. Butyl Rubber:
It is a synthetic rubber mainly used for making inner tubes in tyres. It is vital to the durability of the tyres because of its ability to hold air better than natural rubber, which in turn results in better performance and longer life of tyres.
3. CARB CARBON ON BL BLAC ACK: K:
It is Petroleum based unorganised chemical in the form of quasi – graphite powde powderr of extrem extremee finene fineness ss and with with high high surfac surfacee area compos composed ed essent essential ially ly of elemental carbon. The main input required in the manufacturing of carbon black is feed stock. Carbon black is divided into soft grade and hard grade. In India carbon black used is of N660, N220 and N330 variety.
4. NYLON NYLON YARN YARN / FABRI FABRIC C / TYRE TYRE CORD CORD
Nylon tyre cords are an essential reinforcement material weightage of Nylon tyre tyre yarn yarn in term termss of cost cost of raw raw mate materi rial alss used used in the the high highes estt at abou aboutt 27%. 27%. Caprolactum is a major raw materials used in the manufacture of Nylon tyre cord.
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Falcon Tyres Limited
To sum up, the tyre industry is highly raw-material intensive, with raw material costs accounting for 70% of the cost of production. The export – import policy allows free import of all tyres of new tyres and tubes. However, import of retreated tyres either for use or for reclamation of rubber is restricted. This has led to use tyres being smuggled into the country under the label of new tyres. Though tyre imports and all raw materials for tyres except natural rubber are under Open General Licences Licences (OGL) only import of natural rubber from Srilanka is eligible under OGL.
The profitability of the industry has high correlation with the price of key raw materials such as rubber and crude oil. They account for more than 70% of the total cost. The tyre industry is also capital intensive industry as it requires around Rs. 4 billion to set up a radial tyre plant (tyre having fabric layers parallel) and around 1.5 to 2 billion for a cross ply tyres.
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Falcon Tyres Limited
INDUSTRY PROFILE
The tyre industry is essentially an automobile ancillary business. The demand for its products emanates from the OEM, Replacement and Export Market. All these segments are equally important in terms of volume of business. The tyre industry’s growth is linked to the growth in demand from vehicle manufacturers and the after market.
During 2005-06, the growth in production of 2/3 wheelers and the after market demand were buoyant. Consequently there was a substantial growth in the sales of 2/3 wheeler tyres. Input costs, especially the price of Natural Rubber and Fabric remained high high due to increas increased ed demand demand for tyres in passen passenger ger car and commercia commerciall vehicl vehiclee segments and also export of Natural Rubber.
The tyre industry in India appears to be on the verge of changes due to the ongoin ongoing g proces processs of global globalizat ization ion.. Some Some foreig foreign n compan companies ies are making making efforts efforts to establish establish a manufacturin manufacturing g facility in India by setting up joint ventures ventures to cater to local demand as well as for buyback. Indian companies are also stepping up their efforts and working to capture new markets. Regional trade agreements may also have an impact on the industry’s future performance and development.
They tyre industry has shown tremendous growth during the year. The 2/3 wheeler industry also witnessed substantial growth in the period under review. There has been a marked shift in consumer preference away from mopeds and scooters and towards motorcycles. The motorcycle tyre segment is estimated to grow at 15% per annu annum. m. Give Given n the the curr curren entt econo economi micc reali realiti ties es,, the the indu indust stry ry will will witn witnes esss fierc fiercee competition between companies of varying size and stature, including multinational companies.
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Falcon Tyres Limited
Sector Comments: Ever since the first Indian tyre company, Dunlop Rubber Company (India) was incorporated in 1926, the tyre industry has grown rapidly and today it is a Rs. 9,000 crore industry. India has 2.61 lakh villages, connected by 6.23 lakh kms of metalled roads and 9.81 lakh kms of unmetalled roads. These villages are linked to small towns and cities. There is a daily traffic of over 4.12 lakh trucks, 1.27 lakh buses, 7.23 lakh cars, and thousands of taxix, two-wheelers, three-wheelers, tractors and animal – drawn vehicles on Indian roads. There exists a vast potential for the tyre industry in India. The fortune of the tyre industry depends on the agricultural and industrial performance of the economy, the transportation needs and the production of vehicles. Hence, this is a very sensitive industry, which has to adapt itself to a highly volatile environment.
Market Profile: While the tyre industry is mainly dominated by the organized sector, the unorganized sector holds sway in bicycle tyres. The major players in the organized tyre segment consist of MRF, Apollo Tyres, Ceat and JK Industries, which account for 63% of the organized tyre market. The other key players include Modi Rubber, Kesoram Industries and Good Year India, with 11 percent, 7 percent and 6 percent share respectively. Dunlop, Falcon, Tyre Corporation of India Limited (TCIL), TVSSrichakra, Metro Tyres and Balkrishna tyres are some of the other players in the industry. MRF, the largest tyre manufacturer in the country, has strong brand equity. While it rules supreme in the industry, other players have created niche markets of their own.
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Falcon Tyres Limited
Sector Specifics: The tyre industry is a major consumer of the domestic rubber production. Natural rubber constitutes 80 percent of the material content in Indian tyres. Synthetic rubber constitutes only 20 percent of the rubber content of a tyre in India. World wide, the ratio of natural rubber to synthetic rubber is 30:70. Apart from natural and synthetic rubber, rubber chemicals are also widely used in tyres.
Most of the RSS-4 grade natural rubber required by the Indian tyre industry is domestically sourced, with only a marginal amount being imported. This is an advantage for the industry, since natural rubber constitutes 25 percent of the total raw material cost of the tyres.
The two types of synthetic rubber used in tyres are Poly Butadiene Rubber (PBR) and Styrene Butadiene Rubber (SBR). The former is used in most of the tyres, while the latter is mainly used is the radials for passenger cars. Synthetic rubber accounts for 14 percent of the raw material cost. Unlike in the case of natural rubber, India imports 60 percent of its synthetic rubber requirements.
Apart from rubber, major raw materials are Nyloy tyre cord and carbon black. The former is used to make the tyres strong and impart tenacity to it. The latter is responsible for the colour of the tyre and also enhances the life span of the tyre. Nylon tyre cord comprises 34 percent, while carbon black accounts for another 13 percent of the raw material cost. In India, the carbon black used is of the N660, N220 and N330 variety.
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Falcon Tyres Limited
Sector Trends: Crossply tyres have been used in India for several decades. In these tyres, the ply cords run across each other or diagonally to the outer surface of the tyre. Rayon and Nylon tyre cords are used as the reinforcing medium. These tyres can be retreaded twice during their lifetime and are hence preferred by Indian transport operators who normally overload their trucks. A vehicle with the normal carrying capacity of around 12 tonnes is usually loaded with double the capacity. Moreover, one also has to contend with the bad suspensions and bad road conditions. No wonder, 95 percent of the tyres used in India are crossplies.
Radial tyres have their cords running radially from bead at 90 degrees angle to the rim or along the outer surface of the tyre. The reinforcing mediums used in these tyres are polyester, Nylon, fiberglass and steel. Hence, these tyres are 20 percent more expensive than the crossplies. But they have a longer life and provide lower fuel consumption. The unhealthy condition of the Indian roads has resulted in radial tyres accounting for only 5 percent of the tyre industry as against a global trend of 60 percent. With two-thirds of the capacity of all major tyre manufacturers being reserved for radials, this is a real cause for concern.
Outlook: Globally, the OEM segment constitutes only 30 percent of the tyre market, exports 10 percent and the balance from the replacement market. In India, the scenario is quite different. Nearly 85 percent of the total tyre demand in the country is for replacement. This anomaly has placed the ret readers in a better position that the tyre manufacturers. Retreading is looming over the tyre industry as a colossal threat. The Coimbatore Based Elgi Tyres and Tread Ltd., the largest retreader in India, is giving the tyre barons sleepless nights.
Simply put, rethreading is replacing the worn-out tread of the old tyre with a new one. The popularity of rethreading stems from the fact that it costs only 20 percent of a new tyre but increases its life by 70 percent to 80 percent. Most of the transporters in India retread their tyres twice during its lifetime, while a few fleet owners even retread thrice. In their zealousness to economise costs, they overlook the reality that
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Falcon Tyres Limited
retreading reduces the quality of the tyre. It is highly popular in the South unlike in the North where the transporters overload their trucks and have to ply their vehicles in a rough terrain and environment in which buying a new tyre is the best option. Though retreading has penetrated 25 percent of the tyre market, it has not made of a dent in the rapidly growing two-wheeler and passenger car segments.
The industry, already bogged by over capacity, is facing a severe threat of dumping of cheap tyres by South Korea. Under the Bangkok agreement, signed between India and South Korea in 1976, import of tyres from the latter into India would attract a concessional duty of 33 percent as against the normal tariff of 40 percent.
Two years ago, the industry estimated the growth in the passenger car radial demand at 20 percent per annum. However, the auto recession has hit them badly. But South Korea made a killing by dumping cheap car radial tyres and walked away with 11 percent of the tyre market.
Another threat to the industry is the price of its raw materials, most of which are petroleum by-products. Carbon, synthetic rubber and nylon tyre cord are offshoots of petrochemicals. Thus, the future of the industry will swing with the supply of crude oil.
The biggest threat, however, is yet to fully materialise. It will be from global majors like Bridgestone and Michelin, which control 36 percent of the global tyre market. These players have set up their bases in Southeast Asia and the slump of the markets in this region, coupled with the vast growth potential of the Indian market, is beckoning them towards India. Bridgestone has tied up with ACC for a 100 percent radial tyre unit and Michelin is also marketing its products through retail outlets. The industry is driven more by volumes than by margins and each of the big five in the global tyre industry Continental, Michelin, Good Year, Pirelli and Bridgestone generate an annual tyre production equivalent to the total demand of the Indian market. These MNC’s have deep pockets and can easily withstand losses for 2 – 3 years. Theirs financial muscles also permit them to invest in R and D, which is beyond the reach of the average Indian tyre Manufacturer.
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Falcon Tyres Limited
GROWTH AND DEVELOPMENT OF THE INDUSTRY The history of Indian tyre industry can be bifurcated into following periods such as, 1920 – 1935 1936 – 1960 1961 – 1974 1975
Multi National trading in tyre Multi National manufacturing eras Entry of Indian Companies Onwards broadening of production base
Trading of tyres started in 1936 by DUNLOP in India after setting up of plant at Sangria (West Bengal). During 1960 – 1975 many tyre industries were set up. Among them the leading companies were Good Year, MRF, General Tyre Company, CEAT Tyre, Modi rubber, JK Industry, Apollo tyres.
A) CONSERVATION OF ENERGY
(a) Energy Conservation / Modification measures taken. 1) Introduction of Air Booster. 2) Development of Auto Centering System (In-House) for 36” Calendar 3) Automization with Devon bias cutter system with PLC and Servo Drive. (b) Impact of measure taken. 1) Increased efficiency in compressed air utilization. 2) Reduction in scrap and consistency in quality of products. 3) Consistency in output, reduction in down time and improvement in productivity with quality. (c) Additional Investments / Modifications Proposed 1) Implementation of Cogen. 2) Water Management 3) 68” Calendar Automization
(d) Impact of proposed measures 1) Savings in Power and Fuel Cost
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Falcon Tyres Limited
2) Savings in Brought out Water Cost 3) Improvement in Quality of Products, reduction in scrap generation and reduction in down time.
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Falcon Tyres Limited
COMPANY PROFILE
Incorporated in 1973, FALCON TYRES located in Mysore, Karnataka State, India, is a part of Mr. P.K. Ruia Group, Falcon Manufactures and markets a wide range of Nylon Bias Ply Tyres (which includes) Low aspect ratio of varying Load Index, UniDirectional tyres, Tube less 2 tyres (Scooter) and butyl tubes for two and three wheelers, passenger cars, jeep, light commercial vehicles and farm vehicles, under ‘DUNLOP’ brand for the domestic market and ‘FALCON’ brand for overseas market.
Falcon is the preferred choice of all leading vehicle manufacturers. In India like •
Bajaj Auto
•
Yamaha Motors
•
Escorts
•
Hero Honda Motors
•
Majestic Auto
•
LML
•
Kinetic Engineering
•
Kinetic Motor Company
•
Royal Enfield Motors
Falcon tyres Limited global operation include exporting tyres to Bangladesh, Sri Lanka, Peru, Nepal, European countries, etc.
Falcon tyres meets ISO, BIS, JIS and T & RA AIS 044 and ETRTO standards wherever applicable. Falcon’s R & D center is engaged in upgrading the product performance, quality and introduction of new products. Falcon’s aim is to give satisfaction to its customers by offering High quality and Cost effective Tyres and Tubes.
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Falcon Tyres Limited
Quality Accreditations •
Dot Marking for all 2 & 3 wheeler sizes for export to USA.
•
ECE Marking for Export to European countries.
•
DGS & D Certification for all 2 & 3 Wheeler sizes for supply to Government organizations.
•
Falcon has got ISO 9001:2000 & TS 16949 : 2002
The company has also received Certificate for ISO 14001 : 2004 and OHSAS 18001 : 1999 from M/s. TUV SUDDEUTSCHLAND INDIA PVT. LTD., during the financial year.
The Company supplies to al the major OEM’s directly from the factory. The Replacement Market is catered to through the C & F Agents established all over the country. The Export market is directly handled from the factory at Mysore. The Company’s brand “DUNLOP” has enabled the company to withstand the severe cut throat competition from other tyre companies to a great extent.
A) Company’s Philosophy on Corporate Governance: The company believes in the philosophy of continuous improvement in all facets of its operation. Budgets, investment proposal significant developments are placed before the Board. Committees such as Audit. Share Transfer, Remuneration and Investors Grievances Committee meet regularly to consider aspects relevant to each committee. The Company’s existing practice and policies are in conformity with the requirements stipulated by Securities and Exchange Boards of India (SEBI). The Company has committed itself to continue providing the best service to its investors and also to instill pride of the long term association with the Company among its members.
SEBI revised the Clause 49 of the Listing agreement that deals with the Corporate Governance and made the same applicable from 1 st January, 2006. The company has already started implementing the revised provisions of Clause 49. The Boards has adopted a code of Conduct and made it applicable to all the members of the Board and
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Falcon Tyres Limited
to all General Managers. The Company has also posted the Code of Conduct on its website.
B) Board of Directors In terms of the Company’s Corporate Governance Policy, all statutory and other significant and material information are placed before the Board of enable it to discharge its responsibilities of strategic supervision of the Company and as trustees of stake holders.
The Board has adopted a Code of Conduct for Directors and all the General Managers and above, and a declaration has been obtained from the Managing Director about its Compliance.
The Board meets atleast once in a quarter to review the Company’s performance and financial results and more often, if considered necessary, to transact other business. The Board of Directors of FTL consists of 1. Mr. P.K. Ruia 2. Mr. A. Sadasivam 3. Mr. Prakash .M. Nene 4. Mr. S. Badrinathan 5. Mr. Tarun Gandhi 6. Mr. Ambuj Kumar Jain
The Managing Director of FTL is Mr. A. Sadasivam
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Falcon Tyres Limited
C. Audit Committee The Audit Committee is headed by Mr. P.M. Nene who is the Chairman of the committee. There are two members Mr. S. Badrinathan and Mr. Ravindra Pal Bhatia. Mr. S. Badrinarayanan is the Secretary of the Committee.
The functions of the committee are given below:
a) Review the Company’s financial reporting process. b) Review of half yearly and annual financial statements, before submission to the Board. c) Review with External Auditors, on areas of concern. d) Recommending appointment of External Auditor and fixation of audit fees. e) To ensue compliance of internal control system and action taken on internal audit report. f) To review the Company’s Financial and Risk Management Policies. g) To appraise the Board on the impact of accounting policies, accounting standards and legislation. h) Review of reasons for default in payment to shareholder / creditors etc. i) Review the adequacy of internal audit function. j) To hold periodical discussions with statutory auditors on the scope and content of audit.
C. Remuneration Committee The Remuneration Committee determines and fixes remuneration to executive Director and Managing Director. The remuneration to the Managing Director and the Executive directors had been determined considering the prevalent remuneration for managerial personnel of Companies of similar size and stature.
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Falcon Tyres Limited
D. Investors / Shareholders Grievances Committee The committee is headed by Mr. A. Sadasivam. The committee has other members namely Mr. S. Badrinathan and Mr. P.M. Nene.
The committee looks into redressing the grievances of the investors namely shareholders. The committee deals with grievances pertaining to transfer of shares, non – receipts of Balance Sheet, non – receipt of dividend, dematerialization of shares, complaint letters received from Stock Exchanges, SEBI etc.
During the year, one complaint was received from a shareholder and the same has been resolved to the satisfaction of the complaint and no transfer was pending as on 31st March, 2006.
Competitors Information:
MRF: A leading company in the tyre industry, MRF Ltd. Boasts of an enviable track record. The company has continued in the same vein and has been posting excellent results, not withstanding the winds of recession blowing across the economy. Performance of the company has been commendable in light of the fact that the user industry is facing a slowdown. The company has benefited from better productivity and operational efficiency. The company caters to a host of impressive clients. It has signed on to be the sole supplier for auto giants like General Motors, Fiat and Fort in India. The company is also renowned for its exports, which have also been witnessing positive growth. The company has recently entered the radial tyre segment and has met with positive response. The performance of the company could further improve with the revival of the auto industry. Thus, MRF Ltd. can be expected to retain its position in this segment. However, investors can move out of the scrip, considering the outlook for the industry as a whole.
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Falcon Tyres Limited
CEAT: Being the second largest selling brand in India with a market share of 14.6 percent, CEAT caters primarily to the replacement market. Due to the strong growth in the OEM sector, the share of the replacement market in the total revenue of the company has fallen. However, the production growth in the automobile sector over the past few years should provide a boost to the replacement market in the coming years and CEAT could be a major beneficiary thereof. With the advent of multinationals like Good Year, Michelin, Bridgestone and Continental, a major shakeout in the industry is imminent and the same could result in CEAT, which is already operating on thin margins, being hived off as a joint venture with Good Year, in collaboration with which CEAT has already promoted South Asia Tyres for manufacturing radial tyres in India. With a modest track record on the financial front, the forthcoming results may not be encouraging.
Apollo Tyres Ltd. (ATL) A slow-down in the trye market and rubber procurement at high prices has put the brakes on Apollo Tyres Limited (ATL). The company has traditionally been the market leader in the truck and bus tyres segments. ATL caters to the replacement segment of the domestic market. Following its take over of Premier Tyres, ATL’s market share has risen. Besides the core truck and bus tyre business, fairly considerable part of its turnover comes from automotive tubes and flaps, for which it has commissioned a plant in Pune. Despite a reversal in the fortune of the automobile industry, the chief user base of the company’s products, the demand for truck tyres, particularly in the replacement market, was not encouraging. Even as tyre producers grapple with over-capacity and high levels of inventory, the government stirred a hornet’s nest by proposing free imports of used and second-hand tyres. ATL has conversion agreements for small tyres with TCIL, Stallino Tyres and Rado. Its exports are routed through Apollo International to the US, Germany, Brazil, Sudan, Egypt, Etc. A well – entrenched position in the replacement market, favours ATL and the declining price trend of key inputs like natural rubber and carbon black may provide relief to its wafer – thin margins. At the current price level the scrip has emerged as an attractive buy; thus accumulate its shares in small lots.
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Falcon Tyres Limited
Achievements / Awards: •
Central Excise has termed FTL as “GOOD PAYERS”.
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Sales Tax Department and the Electricity Boards have given “GOLD CARD” to FTL.
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The PF Department has termed FTL as “BEST ENTERPRISE”.
•
In addition to this Mr. J.A.K. Tareen, the Senior General Manager – HR of Falcon tyrs limited, has been conferred with RASBIC AWARD 2005 for Leadership and Life Time Achievement in the field of Human Resource Management.
•
The Falcon family takes pride in the achievement of the Mr. J.A.K. Tareen.
Future Growth and Prospectus: •
To develop wide range of tyres and tubes in two, three and four wheeler and industrial segments for export market.
•
To develop tubeless tyres in two wheeler segment.
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To further introduce advanced technology tyres of directional pattern design and conventional pattern in Motorcycle segment.
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To further develop hi-tech Low Profile tyres in scootrate segments.
The Company expects that there will be growth in demand for two / three wheeler tyres and tubes. However the competition will also be severe with consequential impact on the market share of the various tyre manufacturers as well as their margins. Rubber and Nylon prices are expected to remain firm in the near term and hence the tyre companies have to increase prices if they have to show improved results. The long term outlook continues to be positive for the industry as well as the company. The company believes that its efforts at new product development, market development and improving its operations will help it to meet the challenges of the future.
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Falcon Tyres Limited
The Company has embarked on a 600 million rupees expansion plan. The tyre manufacturing capacity is being raised from 5,50,000 to 7,50,000 per month and the tube manufacturing capacity is raised from 3,50,000 to 7,50,000 per month. FTL is case of emergencies goes for Rush Purchase of Stores & Spares. The minimum and maximum capability of FTL per day is….
TYRES TUBES
MINIMUM 20,000 per day 14,000 per day
MAXIMUM 30,000 per day 21,000 per day
Work-In-Progress: Always FTL maintains one day stock in floor. There are two shifts in production. Total one and half day of stock is always present.
Finished Goods: The finished goods are dispatched to factory (exports), OE Depots (3), and Replacement Depots (32).
Transit Period = Minimum Level Maintained * Demand
MILESTONES OF FALCON TYRE LIMITED:
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Falcon Tyres Limited
1973
:
FTL was promoted by a group of professionals.
1975
:
FTL started its commercial production.
1983
:
Company starts making losses.
1987
:
The company was taken over by Mr. Chhabria a part of Jumbo group or industries.
1991-1992
:
The entire accumulated losses of the company were wiped
off the company carried out on of the most remarkable turnover in the Indian corporate history. 1992-1995
:
FTL expanded its capacity from 2.2 lakhs to 3 lakhs.
1995-1996
:
It emerged as the highest profitable company in the Indian
tyre industry with a net profit ratio of over 5% 1996-1997
:
It made record by selling a million tyres to Bajaj Auto Ltd.
1997-2001
:
FTL expanded its installed capacity from 3.0 lakhs
to 3.5 lakhs. 2001-2002
:
It acquired modern and sophisticated technology from Korea,
Taiwan and UK for producing quality tyres and tubes. Installed capacity expanded from 3.0. lakhs to 4.5 lakhs per month for tyres and tubes production. The turnover of the industry reached Rs. 182.00 crores. 2002-2003
:
The turnover of the industry increased to 182.00 crores due
to rise in price of raw materials. 2004-2005
:
The turnover of the company increased to 223.95 crores.
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Falcon Tyres Limited
The tyre industry is one of the oldest industries in India. The Dunlop introduced the first tyre manufacturing plant in 1936 at Sangeria (West Bengal), which lead to one of most important industry in India, which not only provided gainful employment to Indians, but become one of the major export earner.
The future of the tyre industry depends on the agricultural and industrial performance of the economy, the transportation needs and the production of vehicles. Hence, this is a very sensitive industry, which has to adopt itself to a highly volatile environment.
One of the main reasons for the development of the tyre industry is rubber industry. It has been established in 1921 with a small unit, but now it has increased to 600 units, 30 large scales, 300 medium scales, and 5600 small-scale industry. They produce around 35000 rubber products. India is the third largest consumer of synthetic rubber together in the world.
Most of the rubber produced in India is consumed for making of tyres. This leads to growth of the tyre industry. The rubber produced in the country is consumed as the following. •
Automotive tyre sector – 50%
•
Bicycle tyre and tubes – 15%
•
Foot Wear – 12%
•
Belts – 06%
•
Camelback and latex Products – 07%
•
Remaining Rubber – 10%
India’s with availability of basic raw materials is in abundance, availability of cheap labour, technically skilled manpower and a vast domestic market, is ideally posed to supplement and complement overseas manufactures through joint collaboration to contribute substantial to the world trade of rubber products. This is major reason for origin of tyre industry in India.
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Falcon Tyres Limited
POWER & FUEL CONSUMPTION
2005-2006
1. Electricity a. Purchased - Total Units - Total Amount (Rs. In Lakhs) - Rate per unit (Rs.) b. Own Generation - Units Generated - Units per Ltr. Of Diesel - Cost per unit (Rs.) 2. Furnace Oil - Total Quantity (KL) - Total Cost (Rs. In Lakhs) - Rate Per Litre (Rs.) 1. Consumption per kg. of Prod of Tyre & tube - Electricity (Units / Kg.) - Furnace Oil (Ltrs. / Kg.)
2004-2005
10560009 506.62 4.80
9760383 470.31 4.82
18787 3.09 9.22
398345 3.08 8.73
3782 643.36 17.01
3643 453.39 12.45
0.56 0.20
0.57 0.20
Thus from the above illustration the company has successfully implemented its Shared Value “Conservation of Energy”.
The Falcon Tyres had a shared value of maximizing shareholders wealth and increasing its turnover. Therefore Falcon Tyres registered a net profit of 36.3 million rupees compared with 9.2 million in 2004-05. Total Company turnover stood at 2.55 billion rupees against 2.19 billion the same last year. The company announced a 25% dividend for its shareholders, which was 2.50 Rs. Per share, highest in its history.
SHARED VALUE: As per the model, “ SHARED VALUES” implies “The values that go beyond, but might well include, simple goal statements in determining corporate destiny. To fit the concept, these values must be shared by most people in the organization. Along with this, each department is having its own objectives to be achieved. Some of the objectives that were implemented during the current year were –
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Falcon Tyres Limited
STYLE: Style refers to the employees shared and common way of thinking anbehaving unwritten norms of behaviour and thought. In simple words it is the behaviour which an organization projects to shareholders.
Major Customers of Falcon Tyres 1. Baja Auto Ltd. Akrudi, Pune 2. Bajaj Auto Ltd. Waluj, Aurangabad 3. Bajaj Tempo Ltd. Akrudi, Pune 4. Hero Honda Motors Ltd. Gurgoan 5. Majestic Auto Ltd. Ghaziabad 6. Royal Enfield Motors, Chennai 7. LML Limited, Kanpur 8. Yamaha Motors India Pvt. Ltd. Faridabad 9. Kinetic Engineering Ltd. Pune 10. Piaggio Greaves Ltd. Baramati 11. VST Tillers & Tractors Ltd. Bangalore
COMPANY SECRETARY REGISTERED OFFICE
Mr. S. Badrinarayanan Gold Towers, 50, Residency Road,
FACTORY
Bangalore - 560025 Metagalli, K.R.S. Road
BANKERS
Mysore - 570 016 1. Syndicate Bank 2. Punjab National Bank
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Falcon Tyres Limited
3. State Bank of India M/s. Lodha & Co.,
AUDITORS
14, Government Place (East) Calcutta – 700 001
Ownership Pattern: Shareholding pattern as on 31 st March, 2006
No. of Equity Shares Held
Percentage of Shareholding
A. Promoter’s Holding 1. Promoters Indian Promoters
331614
5.84
Foreign Promoters
3918850
68.98
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Falcon Tyres Limited
2. Persons acting inconcert Sub – Total B. Non-Promoters Holding
4250464
-
a. Mutual Fund and UTI
-
-
b. Banks, FI’s, Insurance Companies
-
-
-
-
74.82
3. Institutional Investors
C. FII’s Sub - Total 4. Others a. Private Corporate Bodies
655512
11.54
b. Indian Public
767074
13.50
7872
0.14
c. NRI’s / OCB’s d. Any other Sub – Total Grand Total
1430458 5680922
TOP DOWN, AUTHORITARIAN IN FALCONTYRES LTD
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25.18 100.00
Falcon Tyres Limited
BOD
Managing Director & Vice Presidents
General Managers & Managers
Officers Workmen / Laborers Permanent (Experienced / Skilled) Trainees, Apprentices, Casuals (Skilled / Unskilled)
TOP DOWN, AUTHORITARIAN
The Managing Directors and Vice – Presidents are the top level decision makers. Their decision should always de approved by the Board of Directors. The general managers and managers are medium level decision processors. They supply needed information to the top level so as to pave the way for efficient decision making by managing directors and Vice – Presidents. The lower level consists of Officers who are management supervisors. The workers and the labor force report daily to the Officers. The decision regarding permanent (Experienced / Skilled) and trainees, apprentices, casuals (Skilled / Unskilled) workers laborers is taken by the officers. All the levels of the organization report through MIS.
PRODUCT PROFILE In India two kind of tyres are manufactured
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1. Crossply tyres 2. Radial tyres In India Crossply tyres have been used for several decades. Rayon and Nylon tyre cords are used as the reinforcing medium. These tyres are retreated twice, during their lifetime and are hence preferred by Indian transport operators who normally overload their trucks. A vehicle with the normal carrying capacity of around 12 tonnes is usually loaded with double the capacity. 95% of the tyres used in India are cross plies because it can with stand bad road conditions.
Radial tyres have their cords running radically from bead at 90 degrees angle to the rim or along the outer surface of the tyre. The reinforcing mediums used in these tyres are polyester, nylon, fiberglass and steel. Hence, these tyres are 20% more expensive than the crossplies. But they have a longer life and provide lower fuel consumption. The unhealthy condition of the Indian roads has resulted in radial tyres accounting for only 5% of the tyre industry as against a global trend of 60%. Twothirds of the capacities of all major tyre manufactures use radials. Retreating is mostly done in India. It is replacing the worn-out thread of the old tyre with a new one. The popularity of retreating stems from the fact that it costs only 20% of a new tyre but increases its life by 70% to 80%. It is highly popular in the South unlike in the North where the transporters overload their trucks and have to ply their vehicles in a rough terrain an environment in which buying a new tyre is the best option. Though rethreading has penetrated 25% of
The tyre market, it has not made much of a dent in the rapidly growing two – wheelers and passengers car segments.
ORGANIZATION STRUCTURE
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Organization structure refers to the basic hierarchical procedure In which the organization carries out their business and accompanying Baggage that shows tasks are divided and integrate
Pascale and Athos in their book “The Art of Japanese Management” says that “Organisation Structure emphasizes that the quality of management depends on the goodness of which amongst all those key manageria l dimensions”.
Board of Board of Directors Directors
Managing Director
VP Operation
Marketing
VP Operation
VP Operation
Finance
Production Expansion
Accounts
Technical Engineering Diversification
Costing
Engineering & Planning Modification
Commercial Accounts
Quality Assurance
Stores Systems Institutional Marketing Secretarial Dept Human Resources Purchase
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Falcon Tyres Limited
OFFICER AND DIRECTORS
Name Badrinarayanan, S. Gandhi, Tarun Jain, Ambuj Bhansali, Sunil Ruia, Pawan Prithviraj, Kokkarne Ravi, S.
Current Position Vice President - Finance, Compliance Officer, Company Secretary Non-Executive Director Non-Executive Director Executive Director Executive Chairman of the Board Additional Director Additional Director
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DEPARTMENTAL ANALYSIS
•
FINANCE:
•
OPERATIONS
•
MARKETING
•
PRODUCTION
•
TECHNICAL
•
HUMAN RESOURCE
•
INFORMATION SYSTEM
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Falcon Tyres Limited
FINANCE DEPARTMENT : The Finance department is headed by Mr. S. Badrinarayanan who is also the company secretary, who is in charge of whole finance department.
The department is sub-divided into: 1. Finance 2. Accounts 3. Costing 4. Commercial Accounts 5. Secretarial Department 6. Purchase (Capacity – Availability – Utilization)
These are headed by Deputy General Manager’s (DGM’s) of respective sub departments.
In Addition, Finance department consists of other executives like Deputy Manager Costing, Assistant Manager and Secretarial Manager – Systems and related officers and Trainees. All are having reporting relationship to VP (Finance) or DGM (Finance). The key functions of Finance department are:
I)
Arrangement of Finance
II)
Maintenance of Accounts
III)
Cost Analysis
IV)
Cost Cutting Methods
V)
Receipts and Payments
VI)
Preparation of P & L Account, Balance Sheet
VII)
Internal Auditing
VIII)
Verification of C & F Agent activities
IX)
It acts as liaison for banks.
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OPERATIONS DEPARTMENT:
Personal Department: Human Resource department controls over 3 main areas: 2. Human Resource 3. Public Relation 4. Personnel Department The major functions of personnel department are: a) Recruitment b) Selection c) Training and Development d) Induction e) Manpower Planning f) Deployment g) Absenteeism h) Demands i) Motivation j) Welfare Measures (Canteen and Fringe Benefits, Ambulance) k) Spoke person of the organization
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TECHNICAL DEPARTMENT
The functions of technical department are as follows: I.
Tyre design and development
II.
Issuing of processes for manufacturing of compound, fabric, bead tyre tube.
III.
Testing of tyres to meet various mandatory requirements.
IV.
Raw material specification (Rubber, Nylon, Carbon Black, Beadwire etc)
V.
Maintenance specification of manufacturing process at the shop floor.
VI.
Passing of compound of fabric for manufacturing process.
VII.
Isolation of rejected batches and their disposal.
VIII.
Approval of vendor and development of new sources.
IX.
Setting of acceptance standards for market.
X.
New tyre manufacturing.
XI.
Interface with Original Equipment Manufacturers.
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PRODUCTION DEPARTMENT I.
Capacity
II.
Availability
III.
Utilization
FALCON MANUFACTURING PROCESS:
Workers work in three shifts i.e. First Shift
:
7.00 a.m. to 3.00 p.m.
Second Shift :
3.00 p.m. to 11.00 p.m.
Third Shift
11.00 p.m. to 7.00 p.m.
:
General Shift
:
9.00 a.m. to 5.00 p.m.
1. Raw Materials Section: Procured from Russia, Mangalore, Kerala etc., About 7.5 lakhs tons per month are bought. 2. Mixing process or Master compound: Removal of FM portion from strange stock of tube. Compound during mesh change. After the green tubes are made out of Nylon thread, rubber coating is made on both side of Nylon thread known as fabrics. 3. Cooling of the tubes and Bias cutter is done for tube extension. Here awlholing and punching is made by converting green tube into an air bag known as PCI curing. After filling of chalk powder and valve fixing. 4. VMI Splicing Machine: To overcome weak splicing knife current has been altered.
5. For curing chalk powder is used External Temperature 190 + or – 2 degree centigrade Performed periphery in mm – 184 Size 3.50 – 10C
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Internal temp – 185+ or – 2 degree centigrade Total curing time in seconds – 185 Inflation time – in sec – 165 Drain and Vaccum time – 20 secs 6. In the whole tube process straining compound is used which is chalk powder. 7. Bladder: Tyre shaping cover – washers are fixed. Tyre Processing Plant: •
Compound mixing → Output → Dumping mill → Conveyor sheet from 1 batch 56 Kgs.
•
Mixing Quality: Chemical mix → such as Carbon, Sulphur, Nylon threads, latex, Ammonia, etc., are used
•
Beading → Thread → Compound
•
Nylon Role fabric coating : compressing
•
Nylon Coating process GT – 38 – Tube.
Mainly tyres are for: Two wheelers – Bajaja Scooter, Three wheelers – Auto Four wheelers like Tractor, 407 Tempo, Maruti Car, ADB Bullock Cart •
Moulding is done later
•
Stensils are fixed → Manufacturing date
•
TWI → Trade Mark.
8. After Tyre manufacturing is will be pilled up in store room according to their sizes.
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AN OVERVIEW OF MANUFACTURING PROCESS
The tyre manufacturing process
In general the tyre manufacturing process takes place in the following way: 1. Mixing the materials:
Various grades of natural and synthetic rubber are combined with carbon black, sulphur and chemical products in an internal mixer to meet specific compound requirements. The resulting blend is called the “Master batch”, which is formed into rubber sheets, and cooled. Some rubber is used for additional processing while the majority is prepared for the extruding stage.
2. Extruding the tread:
Heat is applied to the rubber to make it more elastic and then it is put through extruders machines where the tread and sidewalls, which require two different rubber compounds, are formed into the required shapes. The extrudes produce a continuous sheet of tread rubber, which is then cooled and cut to specific tyre lengths.
3. Weaving the piles:
Spinning cords such as rayon, nylon, steel and polyester undergo a process called “Calendaring”, where they are woven into sheets and coated with rubber on both sides. Once this is finished, the sheets are then cut at the proper angle into specific widths and lengths and eventually used for casing and cap plies, while steel cords are used for the belts.
4. Preparing the bead core:
The bead core is formed by aligning, and then coating plated steel wires with rubber. After, it is wound on a coil a certain number of times to form bead rings, which provide a specific diameter and strength for a particular tyre.
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5. Building process:
The process involves two stages.
Stage 1: Beginning with the woven sheets, the inner liner, body plies and sidewalls are
placed on the building drum. The correctly – positioned beads rings are then attached, which results in the automatic wrapping of the ply edges around the bead core, and the simultaneously movement of the sidewalls into position.
Stage 2: The tyre is shaped by inflating the rubber and applying side tread rubber, two
steel belts and a cap ply to achieve a “green” tyre.
6. Vulcanization:
The “green” tyre is placed in a curing press for a certain period of time (10-15 minutes) at a specific pressure and temperature. Once heat and pressure has been applied to the tyre, it is then removed from the mould having achieved its final size, shape and tread pattern.
7. Trimming:
Excess rubber from the curing process is removed, and the tyre is trimmed to order.
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Falcon Tyres Limited
FLOW CHART FOR TYRE PROCESSING
MASTER COMPOUND FINAL COMPOUND
Thread extension
Bead
65’’ Calendar
winding
bias cutter
Tyre building
painting
awlhoing Tyre curing
finishing
Finish foods
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insullationca lendar
Falcon Tyres Limited
FLOW CHART FOR TUBE PROCESSING
MASTER COMPOUND FINAL COMPOUND
STRAINING
TUBE EXTENSION
VALVE FIXING SPLICING
TUBE CURING
FINISHING
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Each tyre is visually and electronically inspected for balance, quality and uniformity. This final check ensures consistent and reliable performance.
Quality Policy:
We at Falcon Tyres Ltd., are committed to supply quality Tyres, Tubes and Flaps on time to achieve fullest customer satisfaction.
We will achieve this by providing training to all levels, continually improving the systems and processes.
INVENTORY CONTROL SYSTEM: The inventory in FTL consists of 1) Raw Materials 2) Stores and Spares 3) Semi Finished / Work-in-Progress 4) Finished Goods.
Raw Material: The raw material used in the manufacture of tyres is natural rubber. The company gets this natural rubber from Kerala. The transit period is 3 days. The stock period is 7 days means the company will always have 7 days worth stock of raw material natural rubber.
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Falcon Tyres Limited
The raw material used in the manufacture of tubes is synthetic imported rubber. The transit period is one month and stock period is 15 days. The issue to production is by First In First Out (FIFO) method. The storage of raw materials is classified into ‘ABC’ A - Good Quality, B – Medium Quality, C – Poor Quality. Minimum required days of stock for Indian raw materials = (availability with vendor) – Transit period)
Minimum quality shipment of raw materials for tubes to be imported by is bonded with customs = (availability with vendor) – (transit period)
Stores & Spares: This consists of other raw materials like fabric, carbon black, chemicals (Sulphur), bead wire (copper), Consumables, spare parts, packaging material, etc. This is maintained at three levels:
1. Minimum Level - Movements. 2. Medium Level - Delay in order. 3. Maximum Level – No further order.
STORES I.
Opening Stock
II.
Receipts
III.
Issues
IV.
Closing Stock
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MARKETING DEPARTMENT
The functions of marketing department are as follows: I. II.
Advertising Campaigning
III.
Sales Promotion
IV.
Estimation of Sales
V. VI.
Analysis of customer satisfaction Formulation and implementation of strategies (Since derived demand, demand depends on dealers and mechanics)
VII. VIII.
Liaison to customers. Appointment and Maintenance of C & F Agents (Representatives)
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Marketing department also involves marketing the finished goods to I.
OEM (Direct and 3 Depots)
II.
Replacement (32)
III.
Export (Bangladesh, Sri Lanka, Nepal, Peru).
STRATEGY According to McKenzie’s 7 S Model, strategy can be defined as “A coherent set of actions aimed at gaining a sustainable advantage over competition, improving position vis-à-vis customers, and allocating resources”.
MARKETING STRATEGY: The Falcon Tyres Limited follows an aggressive marketing strategy. It uses a wide variety of strategies to create awareness about its products. It deploys the right mix of strategies from its armory to help in generating the right perception about its products. Some of the key marketing strategies followed by FTL are
1. Institutional Marketing: FTL visits various institutions where a large number of two/three wheeler vehicles are parked. There they offer free emission tests. The person offering the emission test will have a logo of “Dunlop Tyre” on is t-shirt. At the time of emission test he will explain about the merits of Dunlop tyres in comparison with other tyre brands. He will also offer free stepney cover for scooters which will also have a Dunlop logo and its features. In bus stand the people who part their two wheelers are given free carry bags to carry their luggage. The bag will have a Dunlop symbol and its qualities. This will help in creating the cognitive component.
2. When the people with two/three wheelers come to petrol bunks for filling up air for their tyres they are given free key chains, caps, t-shirts bearing Dunlop logo. The
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Falcon Tyres Limited
employees of the petrol bunks are also given free caps, t-shirts having Dunlop logo and they recommend Dunlop tyres to their customers. This helps in creating the affective component.
3. The FTL goes to local garages which service two/three wheeler vehicles and distributes the mechanics there and his boys free T-shirts with Dunlop logo and the FTL will tell the mechanics and his boys to recommend Dunlop tyres for the customers who come to that local garage.
4. Contest Marketing: The Falcon Tyres conducts a race in Srirangapatna for ADV (Animal Driven Vehicles) every year. The volunteers are locally selected and these local volunteers and their kids are given free T-shirts, caps with Dunlop symbol. Free meals are given for the thousands in attendance. Free discount-coupons are given for everybody on the purchase of ADV tyre of Dunlop within one year. The first, second and third place winners of the race are given cash prize of Rs. 10,000, Rs. 5000, Rs. 3000 respectively.
5. The customers are given discount as follows: Payment period for product purchased Within one week Within two week Within three week Within one month
Discount 5% 3% 2% 1%
Internal Control Systems: System refers to the procedure through which a particular operation / function is carried out efficiently in either one of the departments or in the entire organization as a whole.
The Company has an adequate internal control, designed to provide reasonable assurance on the achievement of the objectives relating to efficiency and effectiveness
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Falcon Tyres Limited
of operations, reliability of financial reporting, compliance to applicable laws and regulations and for safeguarding assets. The Company’s internal auditors evaluate the internal control in design and in operation their observations being reviewed by the Management and the Audit Committee.
Information System: The implementation of computers has made information flow fast and reliable. The information is versatile. Since FTL has good backup system. The Company has adopted and ERP package known as SAP, even though the implementation is not full. FTL is using it for the extent possible for the flow of information. The software that has been developed by FTL includes FOXPRO, FINANCIAL PACKAGE, MATERIAL ACCOUNTING, FINISHED FOODS PACKAGE, etc. which are used for the processing of the information. The users are well trained at their appropriate levels to ease the understanding of the information flow.
HUMAN RESOURCE DEPARTMENT
The Human Resource Department has the following policies. Employees are given Bonus, attendance award, production incentive (on target achievement), special pay (Salesmen), medical check ups, etc.
The staff in the FTL will come under human resource department under the senior general manager. The department is looking after three sub departments, they are •
Human Resource Department
•
Personnel and Industrial Relations Department
•
Safety and Security Department
HR FUNCTIONS:
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Falcon Tyres Limited
A. Managerial functions:
Planning: It is a pre- determined course of action. Planning pertains to formulating strategies of programmers and changes in advance that will contribute to the organizational goal.
Organizing: it is essential to carry out the determined course of action.
Directing: The next logical function after completing planning and organization is the execution of the plan. The basic function of personnel management at any level is motivating, commanding, leading and activating people.
Controlling: After the three various activities of personnel management, the performance is to be verified in order to know that the personnel functions are performed in conformity with the plans and direction of the organization.
B.OPERATIVE FUNCTIONS
Employment: it includes job analysis, human resource planning, recruitment, selection, placement and induction and orientation.
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Falcon Tyres Limited
Human resources development: it is a process of improving, molding, and changing the skills, knowledge, creative ability, aptitude, attitude etc.
Compensation: it is a process of providing adequate, equitable and fair remuneration to the employee. It includes job evaluation, wage and salary administration, bonus, incentives etc.
Human Relations: it includes motivating the employee, boosting employee morale, developing the employee communication skills, developing the leadership quality etc.
Industrial Relations: it includes Indian labor market, trade union, collective bargaining, industrial conflicts etc.
Recent Trends in HRM: HRM has been advancing at a fast rate. It includes Quality of work life, total quality in HR etc.
EMPLOYMENT / RECRUITMENT:
Recruitment is a process to discover the sources of manpower to meet the requirements of the staffing schedule and to employee effective measures for attracting that manpower for adequate numbers, to effective selection of our efficient workings.
POWERS AND DUTIES OF PERSONNEL MANAGER: POWERS:
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Falcon Tyres Limited
He is authorized to handle independently. To appoint the staff members.
Right to dismiss staff members after issuing memos.
His consent is necessary in all personnel matters.
He is the signing authority.
DUTIES:
To maintain salary records.
To keep employees records.
To maintain accident reports.
To look into the claims made by the employees.
To maintain records of provident fund to grant leaves to the employees.
Attending labor courts.
OPERATIVES FUNCTIONS OF HRD DEPARTMENTS :
Employment. Training.
Wage and Salary administration.
Welfare Measures.
Promotion.
Sanction of Increments.
Disciplinary action against misbehavior of employees.
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Termination and retirement. Employee’s Attendance.
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Falcon Tyres Limited
WAGE AND SALARY :
In FALCONTYRES LTD the pay structure consists of the following components.
Basic wage / salary.
Bonus and other incentives.
Fringe Benefits.
Basic wage is a price for service rendered.
Dearness Allowance:
Dearness Allowance is also known as cost of living allowances. This allowance is given to protect the real wage on workers during inflation. In this organization the D.A is fixed on the basis of price index, therefore, the D.A varies yearly. At present, the D.A., HRA, are also provided by Falcon tyres will not issue any dearness allowance to employees. SKILL:
Skills are considered as “One of the most crucial attributes or capabilities possessed by the organization”. The term skills include those characteristics or strengths which most people use to describe the Company.
The Company continues to have cordial and harmonious relations with its employees. In line with the changing business environment, the Company is training and developing the Human Resources. Several training programmes, structured to the needs of the individual employee and also to meet the requirement of ISO 9001 : 2000 and ISO / TS 16949 : 2002, ISO 14001 : 2004 and OHSAS 18001 : 1999 quality related CERTIFICATION, were conducted. Regular audits on safety and environment are
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Falcon Tyres Limited
done by competent professional and the recommendations are implemented to provide a safe and clear work environment.
Regular training programmes on safety are
conducted to increase awareness and commitment for safety. The total number of permanent employees on the rolls of the Company as on 31.03.2006 was 864.
Quality First Quality Next Quality Always •
Take pride in your job
•
Get things right first time
Add value for customers •
Customer is first, next and final
•
Reduce costs
•
Deliver on time
•
Be innovative look for continual improvement
•
There is always a better way of doing things
Staff: The company is accommodating various employees, they comprise of personnel, staff, workers and trainees. Most of them are from Mysore City. The company continues to have cordial and harmonious relations with its employees. Regular audit on safety and environment are done by the competent professional and the recommendations are followed to provide a safe and clear work environment. The total number of employees on the roles of the company as on 31 st July is 1139 is distributed in different departments.
The company has successfully formalized in long term settlement. The longterm wage settlement includes better productivity optimization of output and continuing harmonious industrial relation.
EOHS- Policy: We at Falcon Tyres Ltd., manufacturing Tyres, Tubes and Flaps are committed to develop environmental riendly healthy and safe working systems. We shall achieve this by:
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Falcon Tyres Limited
•
Use of proper and efficient methods in our operations with the aim of conservation of natural resources, prevention of pollution and hazards.
•
Compliance with applicable legislations and regulations.
•
Training at all levels and continually improving Environmental, Occupational, Health and Safety performance.
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VISION STATEMENT:
The Company believes in the philosophy of continuous improvement in all facets of its operation and to have leadership status in two and three wheeler segment.
MISSION STATEMENT: Falcon’s turnover has to cross 500 crores mark in next 2 years consolidating its market position and improvement in customer relations and product quality.
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SWOT Analysis (Strength, Weakness, Opportunities & Threats):
Strategic management is concerned with establishing proper organization environment fit. It involves watching the organization factors with the environment factors. Strategic management therefore, involves analysis of the organization factors (i.e. Strengths and Weakness of the organization) and the environment factors (i.e. the threats and opportunities in the business environment).
SWOT means, analysis and assessment of comparative strengths and weakness of a firm in relation with their competitor and environmental opportunities and threats, which a company may likely to face. SWOT analysis is such a systematic study and identification of those aspects and strategies that best suit the individual company position in a given situation. It should be based on logic and rational thinking such that a proper strategy improves an organization business strengths and opportunities and at the same time reduces its weakness and threats. The SWOT ANALYSIS of FTL is given below:
STRENGTHS:
•
•
Brand Equity of “DUNLOP” Necessary infrastructure and additional capacities created to cater to the marketing requirements.
•
The company has increased its presence in all the markets viz. OE, Replacement, Exports.
•
Consistent quality and after sales service with full fledged R & D Backup.
•
Flexibility in production.
•
Excellent manpower.
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Falcon Tyres Limited
WEAKNESS: •
Depends on “OE” Customers
•
Loss of flexibility in pricing of products due to severe cutthroat competition.
•
Non-participation in OEM’s like TVS, Honda Motors, etc., the fast growing companies.
OPPORTUNITIES: •
To corner the market share of the unorganized sector (18% of the total market is unorganized).
•
To develop Export Market (Especially South-East Asian countries with strong 2-wheeler and 3-wheeler presence
•
To achieve volume and ease dependence on OEM’s through corporate tie ups.
THREATS:
•
Increased presence of global players in the local market.
•
Unacceptable rise in prices of Natural – rubber and crude – oil products (vital ingredients in tyre manufacturing)
•
Technical expertise of foreign players, especially in tubeless tyres.
•
Over dependent on Natural Rubber (NR).
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FINDINGS:
•
•
•
•
•
Loss of flexibility in pricing of products due to severe cutthroat competition.
It is found that most of the employees are happy and satisfied with their salaries. There is good co-ordination and understandings between the employees and employer. Increased presence of global players in the local market.
They have given least importance for the promotional activities.
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Falcon Tyres Limited
SUGGESTIONS:
•
Since there is severe competition in the market, they should give More importance to the quality of the product.
•
The employees should be promoted to the higher posts depending On their performance and efficiency but not with their experience.
•
The employees should be provided with
rewards for their excellent
Performance in order to motivate them.
•
The company should give importance to the promotional activities in order to improve its efficiency.
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Falcon Tyres Limited
CONCLUSION Our exhaustive research in falcon tyre industries threw up some interesting trends which can be seen in the above analysis. A general impression that we gathered during Data collection was the immense awareness and knowledge among people about various companies’ products. People are beginning to look beyond falcon tyre for their needs and are willing to trust the company with their hard earned money. A high penetration of print, radio and Television ad campaigns over the years is beginning to have its impact now. The general satisfaction levels among public with regards to policy and agents still requires improvement.
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