How Pawan Ruia transformed tyre and heavy equipment industry almost single-handedly

There are certain industries in India, wherein not only major, but small players also need out-of-the-box thinking and business acumen to flourish. Both tyre industry and heavy equipment industry fall under the same category.

The future of these industries was dependent on foreign players in the country, before Pawan Ruia changed the entire sector with his far-sightedness. The chairman of Ruia Group, Pawan Ruia has been setting up such examples since the day he started working. With his foray into the business arena being as recent as 1995, Ruia has been making headlines for his entrepreneurial mindset.

The man who began with a charted accountancy firm initially, went on to opening Ruia Cotex, a textile manufacturing company, which was an Rs 10-cr project. After the establishment of his first company. In just 2 years, the Ruia Group MD set up Kamplapur Sugar Industries, a project worth Rs 80-crore.

Soon Pawan Ruia made a bold move when he acquired Jessop and Company. A 220-year-old engineering company, which was at that time facing a downfall, was turned around into a profitable organization by the mastermind. From negative balance sheets, Jessop had a net profit of Rs 100 million in 2 years. The example set by Ruia silenced all those who thought of the acquisition to be a bad move.

Pawan Ruia’s journey took major turns and his success march led him to taking over two of the biggest names in the tyre industry. Dunlop Tyres and Falcon Tyres, which were once high-grossing companies, were at their lowest. After the acquisition by Ruia Group, gradual changes started happening in both the companies.  

All the 4,000 employees that Dunlop had were re-employed, the labour was secured, the legal glitches were resolved and the production began. Today, both these organizations are testament to the determination and hard work of Pawan Ruia. What many people were skeptical about a few years back, was turned into a profitable business by the man who had the courage to rebuild these falling tyre manufacturers.

Amidst Changing Prices and Market Challenges, Tyre Industry Continues to Innovative for Sustainable Growth

The Indian tyre industry is witnessing a decent growth in the current year, as compared to the previous year, amidst the challenges of obtaining raw materials and auto industry slowdown. 

In FY2018-19, one of the major players in the industry, Apollo Tyres has reported 18 per cent of growth at Rs 17,273 crores, compared to Rs 14,674 crores in 2017-18. On the other hand, JK Tyre achieved a turnover of Rs 10,000 in FY2018-19 by increasing its market presence. Even with an unprecedented slowdown in the auto industry, the tyre manufacturers have been able to perform efficiently. 

The tyre industry is driving on a robust de-risking strategy by looking at non-auto segments like off-highway and OTR tyres. It continues to innovate by looking at efficient and cost competitive products amidst the changing pricing and market trends, market fluctuations, variations in demand-supply proportions, driving forces, limitations, etc.

The availability of the raw materials is another concern for the tyre manufacturers. However, major players like Ruia Group have been agile and flexible in their operations. They have been operating in the international markets, chalking out a strategy to turn global and expand the operations.         

Strategic plans, promotional activities, brand developments, mergers, acquisitions, ventures, amalgamations and partnerships are some of the traits acquired by major tyre manufacturers. The Indian tyre industry is utilizing all its capabilities to cope up with the change in preference of the users, says Pawan Ruia, Chairman of Ruia Group. It is estimated to grow by 11 per cent in the unit volume, on the back of strategies previously used in the advanced markets of the US and Europe.

This shift in focus has helped the tyre manufactures to formulate schemes, combining market knowledge with technology to get a larger share of the market. They are working closely with OEMs (original equipment manufacturers) to get the configuration right.

The latest regulations and norms are laying stress on setting up new standards in a challenging environment. Moderating costs despite of rising raw material prices have deepened the market presence of tyre manufacturing brands. They are also laying emphasis on the future growth by anticipating the change in infrastructure and mobility, says Pawan Ruia.

The industry continues to look at new ways to grow and achieve better export performance, making new strides in quality improvement. It is also aiming at rolling out fuel efficient and low rolling resistance tyres to address the needs of manufacturers with electric vehicles. Taking pro-active initiatives to build confidence, the tyre industry is re-visiting and solidifying all areas of its interest to create an impact.