December 20, 2018 << Back to Press Release
December 20, 2018
Look up Gangaikondan on Wikipedia and you learn that it is one of the industrial hubs of Tirunelveli in Tamil Nadu. It is here that Alliance Tire Group (ATG) has a sprawling factory in the SIPCOT Special Economic Zone.
A leading name in the global off-highway tyre market, ATG is a subsidiary of The Yokohama Rubber Co, Japan. The Tirunelveli plant, earlier owned by private equity firm KKR and the Mumbai-based Mahansaria family (before Yokohama’s acquisition in 2016), is one of the largest off-highway tyre manufacturing units in the world.
“The Tirunelveli factory, a key hub for ATG, will see its production capacity go up from 80,000 tonnes a year to 87,500 tonnes by 2019. About 2,000 people are working at this unit,” says Anil Gupta, Chief Operating Officer.
Beyond Tirunelveli, ATG has factories in Gujarat and Israel. The combined installed capacity across these three plants is about 1,50,000 tonnes annually year. The $100 million expansion now underway will increase this by over 50 per cent to 2,30,000 tonnes by 2020.
While a majority of off-highway tyre production happens in the Indian plants, Israel focuses on production of high-performance tyres. Additionally, there are R&D centres in India, Israel and North America.
ATG has in its portfolio the Alliance, Galaxy and Primex brands. The company’s tyres are used in agriculture, construction, forestry, and material handling.
The Tirunelveli factory is not only a key part of its growth plans but also marks a success story for the Tamil Nadu government. This is because it managed to divert one of the largest manufacturing investments into this industrially-backward southern district and created jobs in the process.
While investors made a beeline to establish factories in Sriperumbudur and Oragadam near Chennai (a list that includes big brands like Renault Nissan, Daimler India Commercial Vehicles and Royal Enfield), Alliance Tire agreed to set up its plant in Tirunelveli district a decade ago.
Its proximity to the Tuticorin port has helped the unit become a key export hub for the group. R Srinivasa Raghavan, AVP-Manufacturing at the Tirunelveli unit, has little reasons to complain about the journey thus far.
“Unlike other tyre factories, the scope of automation is very limited here. Though we make nearly 800 varieties of tyres, there is no dearth of innovation,” he says.
The management’s efforts to improve productivity with lean manufacturing has paid dividends thanks to the ‘My Machine Concept’. This programme has motivated workers to come out with various innovative automation ideas that have been implemented to save on time and energy.
During January-September 2018, the company managed to get 804 innovative ideas from its employees, of which nearly 70 per cent have been implemented. Going forward, the Tirunelveli unit will play a key role in fuelling ATG’s vision of becoming a global market leader in the agriculture, forestry, construction and material-handling tyre segments.
Beyond the plant, the company is pulling out all the stops to support the larger ecosystem. It has put in place an innovative way of growing trees quickly thanks to a technology breakthrough made by a Japanese professor. The district collector has now asked for this to be replicated in other places.
In its latest annual report, Yokohama Rubber Co has spoken of the importance of the ATG acquisition in the overall global strategy for tyres. “Alliance Tire Group brings to our organisation its historical momentum of high profitability and steady growth,” states President, Masataka Yamaishi.
He then cites the example of a new line of cost-competitive passenger car tyres launched in May 2017 in Europe under the Alliance name. “Alliance Tire Group enjoys excellent name recognition in Europe, and our new brand gives us a vehicle for coping with low-cost competitors in Europe without compromising the Yokohama brand,” says Yamaishi.
In the same annual report, Hikomitsu Noji, Vice Chairman and Member of the Board, Chairman of ATG, has stated that it has earned high regard among customers for its careful attention to their needs. “It has developed products, for example, in response to customer requests for tyres that do not damage farmfield ridges and for tyres that do not sink into the farm field soil. Customers frequently cite that kind of responsiveness as a reason for choosing Alliance Tire Group tyres,” says Noji.