In an interaction with Shweta Papriwal, Editor, indiainfoline.com, K.K. Kapur, CEO & Whole Time Director, Indag Rubber Limited, said, “Retreading is linked to the usage of commercial vehicles which in turn is dependent on the economy. With improvement in road network and increased awareness on careful handling of radial tyres to maintain proper casing will bring in more tyres for retreading in the long run.”
To start with, can you take us through your journey of being India’s Most trusted Retread Manufacturer?
Indag Rubber was incorporated in 1978 by Mr. Nand Khemka jointly with Bandag, US, to build a world class retreading material manufacturing setup.
Indag revolutionized the retreading industry in India with the introduction of its cold retreading technology. In 1979, the Company set up its plant at Bhiwadi, Rajasthan where commercial production of pre-cured tread material, cushion gum, precured rubber patches and specialized retreading equipment started in October 1984.
In 2006, Indag set up another plant at Nalagarh in Himachal Pradesh. In 2012, the Company expanded the capacity at Nalagarh plant from 6,000 MT to 13,800 MT. In order to be ahead of the curve, the capacity was further expanded to 20,000 MT.
Indag forayed into the foreign markets with its premium product range under the brand name “ZOMA”. The company has exported its retreading materials to the Middle East, Africa, Malaysia, Indonesia, etc.
Could you tell us about the market size of the retreading industry in India?
The size of the of the Retreading Market is estimated at ~Rs 30–32 billion. Out of this, ~25% is held by the Hot Retreading Industry and rest 75% by the Cold Retreading Industry. Out of the Cold retreading industry, 50% is held by the organized players and remaining 50% is held by unorganized players. Indag holds ~20-25% market share of the cold retreading market. The unorganized market consists of local players using inferior quality rubber and unreliable processes.
What are the different products that Indag manufactures?
The Company is engaged primarily in the manufacturing of Pre-cured Tread rubber, Un-vulcanized Rubber Strip Gum (Bonding Gum), Universal Spray Cement and Tyre Envelopes which are used for retreading of tyres and providing tyre retreading services.
PTR, our leading product is manufactured in different compounds and designs based on vehicle application.
Can you throw some light on the benefits of opting for retreading of tyres?
Tyres are most integral component of any vehicle. Now a days as we all know, the cost of tyres has increased significantly. When a tyre is worn out, there are two options either to replace the tyre or one can go for retreading.
Retreading has several benefits but to mention some key benefits are, it costs less than 1/3rd of a new tyre, Retreading gives as good mileage as a new tyre, retreading can reduce the CPKM (cost per Km) to 1/3rd of a new tyre, it is environment friendly, saves 15 gallon of oil on every tyre and even save more energy, carbon dioxide emission and raw materials with each product cycle.
What is the Unique feature of Indag over the competition?
Indag is committed to consistently deliver world class quality products and services, continuously improve upon its quality standards to meet the best expectations of customers. Features of Indag can be described as:
- Pioneers of cold retreading in India since 1978
- State-of-the-art manufacturing plant
- Wide range of products for all kind of vehicles and application
- Dedicated service team for retreading process and machinery consultancy
- Pan India distribution network
- Our Cost Efficiencies have been maintained throughout thereby improving our Margins, compared to our peers
Penetration level of retreading is lower in India as compared to other developed regions like USA, Europe etc. In India, the penetration level of organized retreading is at ~40% compared to 85% in USA and ~80% in Europe.
Tell us about your distribution network and brand promotion strategy?
The Company has a pan India distribution network with 200+ Dealers, 1500+ Retreaders and 50+ sales team on ground served by 25 Depots cross the country. Our dedicated sales & service team is engaged in educating the fleet owners about benefits of qualify retreading.
We have introduced mobile App based program, “Indag Super Hero’s” aimed at reaching out to small retreaders in the interior regions. The company has also launched Indag Certified Retreaders program to strengthen its retreader network in top commercial vehicles hubs. This year we have also invested in brand visibility, brand communication and brand engagement through various ATL and BTL initiatives.
How has the retreading industry changed post implementation of GST?
Retreading Industry in India is dominated by unorganized players. There has been a slow shift towards the organized players. GST implementation has taken away the undue price advantage due to tax evasion by unorganized setups.
Certain percentage of your sales goes to State Transport Units, could you tell us about your recent orders?
Indian Transport Industry is dominated by State Transport Undertakings (STUs) since private sector is highly fragmented. The STUs have a special responsibility to provide road-based passenger mobility in the country. Indag bids for different STUs in order to supply precured tread and other allied products for their fleets. Currently we are the leading suppliers of retreading materials for the large STUs in states such as Karnataka and Maharashtra. We are also working with STUs in Punjab and Himachal.
What are the growth drivers for the Industry amidst the current auto slowdown?
Demand for retreading of tyres depends on the usage of the commercial vehicles which in turn depends upon the health of economy, which we hope to come back to normalcy soon.
With better road infrastructure and GST implementation, the average running of vehicles has gone up which in turn has improved the fleet utilization. This is having a direct growth impact on retreading demand. The Indian commercial tyre industry is maturing fast towards the radialization with 3-4% growth Y-o-Y. AT present radialization has reached nearly 53% and is improving the dynamics of retreading, multiplying number of retread opportunities to 2-3 times per life cycle. Imposition of anti-dumping duty on imports of cheap Chinese tyres has also given industry a boost.