Yokohama-backed tyre company ATG to set up fourth plant

Alliance Tire Group (ATG), an off-highway tyre specialist owned by Japan’s Yokohama, will set up a new facility by the end of the year as it looks to grow its market share in the niche segment.

The Mumbai-based company said it will take a call on the location of its fourth plant later, which will entail an investment of around $300-400 million. It already has two plants in India (one each in Gujarat and Tamil Nadu) and one in Israel.

“We are continuously working on adding more and more capacity. At the same time we are looking at new sites in India and outside as we see demand coming up in the coming years," ATG's chief executive officer Nitin Mantri told Moneycontrol.

"We are doing a due diligence  on where should our new factory be optimally be located. It should be done by end of this calendar year,” he added.

The privately held company, which clocked a turnover of $650 million last financial year, exports around 95 percent of its annual production of about 130,000-140,000 tonne tyre from India serving 120 countries across six continents. These include sales operations in US and Europe.

ATG offers 3,000 different variety of tyres sold under three brands, Alliance (for agriculture), Galaxy (for construction and industrial) and Primex (for forestry and mining).

The off-highway tyre segment has witnessed a growth of 3-4 percent globally with ATG recording a growth of 15-20 percent. Mantri said that the market for such tyres in India is growing and ATG is focusing for further expansion in the country.

Domestic market

“We had not spent too much time in our home market which is India and we are working on changing that. We entered India (retail market) two years ago and it is a highly competitive market with competition from MRF and others," Mantri said.

ATG is sandwiched between a premium manufacturer like France’s Michelin and a group of Chinese manufacturers who are in the budget segment. ATG is now looking to move up the vale chain to position itself closer to the premium brands.

“We are a value brand. Now that we have been acquired by Yokohama we are about to make a leap in terms of technology, portfolio and branding. We are working on how we can offer higher quality products than we have offered in the past and start commanding a bit more premium. Typically a value brand is 20-25 percent lower than a premium brand so we are trying to figure out a way how we can narrow that down”, added Mantri.