Apollo Tyres an­nounces three year part­ner­ship with Manch­ester United

Business Sphere - - Apollo Tyres | Back to China - By Our Cor­re­spon­dent

(11 Fe­bru­ary 2014)

As part of this as­so­ci­a­tion, Apollo Tyres with its phi­los­o­phy of ‘go the dis­tance’ will cre­ate foot­ball based play zones in lo­cal com­mu­ni­ties us­ing re­cy­cled rub­ber in the UK and In­dia and en­cour­age healthy life­styles among young­sters

Apollo Tyres, one of the lead­ers in tyre man­u­fac­tur­ing and dis­tri­bu­tion, to­day an­nounced a three year re­gional part­ner­ship with Manch­ester United Foot­ball Club, which will see Apollo Tyres be­come the Club’s of­fi­cial Tyre Part­ner in the UK and In­dia. While the Apollo, is a leading brand in In­dia, the tyre man­u­fac­turer, which has an­nual rev­enues of over US$ 2.34 bil­lion, will lever­age the high pro­file part­ner­ship with Manch­ester United to raise aware­ness of its brand among po­ten­tial cus­tomers, busi­ness part­ners and con­sumer au­di­ences around the world. Com­ment­ing on the an­nounce­ment, Onkar S Kan­war, Chair­man, Apollo Tyres Ltd said, “This is a very im­por­tant part­ner­ship for us as a com­pany and clearly demon­strates our global am­bi­tions for our busi­ness, and the brand. Very few sports plat­forms deliver a global pro­file and aware­ness and we be­lieve the im­pact of this re­la­tion­ship will be sig­nif­i­cant in help­ing to make Apollo a glob­ally recog­nis­able brand.” A key el­e­ment of the part­ner­ship will be a joint com­mu­nity com­mit­ment to en­cour­age young people to ‘go the dis­tance’ and seek a higher level of ex­cel­lence in build­ing sport­ing skills and de­vel­op­ing healthy life­styles. Draw­ing on its phi­los­o­phy, Apollo will build foot­ball pitches made from re­cy­cled rub­ber in lo­cal com­mu­ni­ties across the UK and In­dia. The first ‘go the dis­tance’ pitch will be built within the grounds of Old Traf­ford be­fore sim­i­lar pitches are rolled out across the UK and In­dia. This ini­tia­tive will in­clude some

spe­cific skills chal­lenges, en­cour­ag­ing users of the Apollo foot­ball play zones to achieve ex­cel­lence in con­trol, agility, speed and pre­ci­sion. Kan­war con­tin­ued, “It is a mat­ter of great pride for us to in­tro­duce a new healthy liv­ing ini­tia­tive un­der our cor­po­rate so­cial re­spon­si­bil­ity (CSR), to cre­ate new play zones for the youth in the UK and In­dia. In its aim to stim­u­late the next gen­er­a­tions to go the dis­tance, this as­so­ci­a­tion re­ally brings to life our brand val­ues of high per­for­mance, qual­ity and ex­cel­lence.” Manch­ester United Group Man­ag­ing Di­rec­tor, Richard Arnold com­mented, “Apollo Tyres is a leading player in the tyre in­dus­try and its rate of growth and de­vel­op­ment into new ter­ri­to­ries made it an at­trac­tive part­ner for the Club. With a com­bined fan base close to 46 mil­lion fol­low­ers in both the UK and In­dia, we are con­fi­dent in pro­vid­ing Apollo with a cap­tive au­di­ence. “This part­ner­ship will al­low Apollo not only to pro­mote its brand, but also to en­gage and com­mu­ni­cate with our fans, like we ob­served to­day with the skills demon­stra­tion. “Manch­ester United is ded­i­cated to youth in­vest­ment and de­vel­op­ment, whether through our Academy or via the work we do in the com­mu­nity.” To­day’s an­nounce­ment was made at a launch event at the Club’s Aon Train­ing Com­plex, which was at­tended by the se­nior man­age­ment of Apollo Tyres, led by Chair­man, Onkar S Kan­war and Manch­ester United Group Man­ag­ing Di­rec­tor, Richard Arnold. Over three decades old, Apollo Tyres is head­quar­tered in Gur­gaon, In­dia, and has a man­u­fac­tur­ing pres­ence in Asia, Europe and Africa. The com­pany ex­ports to over 100 coun­tries and is backed by a global work­force of ap­prox­i­mately 16,000 em­ploy­ees.

Apollo Tyres turns its back on China

Bit­ten in China, the chief ex­ec­u­tive of In­dia’s Apollo Tyres is twice shy. His am­bi­tious $2.5bn deal to ac­quire Cooper Tire, a far larger US ri­val, would have cat­a­pulted Apollo into the ma­jor league of global tyre pro­duc­ers. That was un­til a joint ven­ture be­tween Cooper and its Chi­nese part­ner – which ac­counts for around a quar­ter of Cooper’s global rev­enue – erupted in ou­trage and anger that only sub­sided when the takeover was dead. “I am not go­ing into China,” says Neeraj Kan­war, man­ag­ing di­rec­tor, just over a month on from the of­fi­cial end of his bid. “We are a very open and trans­par­ent com­pany . . . I don’t think China is set up for us right now.” What would have been the biggestever ac­qui­si­tion of a US com­pany by an In­dian buyer was steered off-track al­most as soon as it was an­nounced, when work­ers at the Cooper Cheng­shan Tire fac­tory in Shan­dong went on strike to protest against their pos­si­ble change of part­ner. By Au­gust, 5,000 Chi­nese work­ers were re­fus­ing to work and had locked out their Amer­i­can bosses from the fac­tory, com­plain­ing that they were not ad­e­quately con­sulted over the deal. “We heard from Cooper that ev­ery­thing was fine and there was no is­sue. I guess the read­ing of this guy came from their side. They thought they had him [Cheng­shan chair­man Che Hongzhi]. But they didn’t,” Mr Kan­war says in an in­ter­view with the Fi­nan­cial Times. “I think Cooper should have done it dif­fer­ently from the start. They should have taken this guy into con­fi­dence.” Mr Kan­war, whose fa­ther is the chair­man and whose fam­ily owns

al­most half of the com­pany, says ef­forts to con­vince Mr Che that his busi­ness would be safe un­der new man­age­ment were in vain. “I went to meet Chair­man Che. In the be­gin­ning it was a rough meet­ing with him. I just felt, fine, let’s close our eyes and try and make friends with this guy, there is no point ar­gu­ing be­cause there was a big­ger strate­gic take here,” he says. “You just got a sense that this guy was com­pletely con­trol­ling the show. He is the boss in that city. “We went out to com­mit to the jobs in China, to com­mit to ex­pan­sion, to capex, to growth,” says Mr Kan­war. “He couldn’t care that we were In­dian. He was up­set with the Amer­i­cans . . . his re­la­tion­ship with the Amer­i­cans was very, very bad to be­gin with . . . This is what he told me.” Cooper and Apollo, once pos­si­ble part­ners, are now at log­ger­heads in court, each de­mand­ing a set­tle­ment from the other for ter­mi­na­tion of the deal, which would have cre­ated the world’s sev­enth-largest tyre com­pany. Cooper de­nies that it is li­able to pay a $50m ter­mi­na­tion fee, while at the same time pur­su­ing Apollo for $112.5m in dam­ages, in ad­di­tion to un­spec­i­fied “other pos­si­ble dam­ages”. Cooper has ac­cused Apollo of us­ing the Chi­nese strike as an ex­cuse for back­ing out of the deal. The bid, which dragged down the share prices of both tyre­mak­ers and raised fears over the huge debt bur­den that the new com­pany would as­sume, was viewed by an­a­lysts as a test case for both large out­bound In­dian in­vest­ments and the sen­si­tiv­i­ties of deal­ing with part­ners in China, a cru­cial growth mar­ket for tyre­mak­ers and many other in­dus­tries. “The team has learnt a lot in this process. It has given us a lot in terms of how to do a deal,” says Mr Kan­war in his of­fice in Lon­don’s May­fair. “Amer­ica has taught me . . . you have to read the fine print very care­fully,” he says. “It is run by lawyers and run by courts . . . this is a very, very le­gal so­ci­ety. One needs to be ex­tra, ex­tra care­ful. That’s one learn­ing for me.” As a re­sult of the furore, Cooper has agreed for an in­de­pen­dent ar­biter to value the Chi­nese joint ven­ture and has given Cheng­shan the right to buy full con­trol of it, should it choose to. For Apollo, a China-less fu­ture means more money to spend on other growth mar­kets. The com­pany will spend up to $500m on two new fac­to­ries, in east­ern Europe and in south­east Asia, as part of its aim to be­come one of the world’s 10 largest tyre man­u­fac­tur­ers within the next five years. “It is go­ing to be time-con­sum­ing [to match Cooper-Apollo size]. You will need to cre­ate much more mar­ket­ing spends. Many more man­u­fac­tur­ing cen­tres . . . It’s a long process,” says Mr Kan­war.

Apollo Tyres closes African deal with Su­mit­omo Rub­ber In­dus­tries

Move aimed at con­sol­i­dat­ing on two global brands -Apollo and Vre­destein Apollo Tyres to­day an­nounced the clo­sure of the trans­ac­tion with Su­mit­omo Rub­ber In­dus­tries (SRI), where in SRI takes over Apollo Tyres South Africa (ATSA) in­clud­ing the Lady­smith pas­sen­ger car tyre plant, and the Dun­lop brand rights that Apollo had in 32 coun­tries of Africa, for US$ 60 mil­lion. Apollo re­tains the Dur­ban plant which man­u­fac­tures

Truck & Bus Ra­dial (TBR) tyres and Off High­way tyres (OHT) used in the min­ing and con­struc­tion in­dus­tries. Post this trans­ac­tion, Apollo Tyres will con­tinue to sell Apollo, Vre­destein and Re­gal branded tyres in Africa, and at the same time fo­cus on cre­at­ing and strength­en­ing its sales and dis­tri­bu­tion net­work across the con­ti­nent. As agreed, both com­pa­nies will also un­der­take con­tract man­u­fac­tur­ing of their re­spec­tive brands at each other’s fa­cil­ity to have lo­cally man­u­fac­tured prod­ucts avail­able for the mar­ket. Com­ment­ing on the clo­sure of this trans­ac­tion with Su­mit­omo Rub­ber In­dus­tries, Onkar S Kan­war, Chair­man, Apollo Tyres Ltd said, “It has been a very event­ful jour­ney for us in Africa, since our en­try in 2006 with the ac­qui­si­tion of Dun­lop Tires In­ter­na­tional. This has given us a very sound un­der­stand­ing of the grow­ing African mar­ket and helped us de­velop the mar­ket for our prod­ucts in Latin Amer­ica as well. Us­ing South Africa as the base, we will now fo­cus on brands where we own global rights, which we have al­ready been sell­ing in South Africa for the past few years, for the African and Latin Amer­i­can mar­kets.” The em­ploy­ees, re­tained by Apollo in South Africa, post this trans­ac­tion clo­sure, will be work­ing for the newly formed com­pany, Apollo Dur­ban (Pty) Ltd. No jobs have been lost in this trans­ac­tion be­tween the two en­ti­ties -- Apollo and SRI. Apollo Tyres an­nounced this trans­ac­tion with Su­mit­omo Rub­ber In­dus­tries on May 29, 2013.

Apollo Tyres ap­points Mind­share as its global me­dia agency

To be ser­viced out of com­pany’s Global Mar­ket­ing Of­fice in Lon­don Apollo Tyres, a leading tyre man­u­fac­turer, to­day an­nounced the ap­point­ment of Mind­share as its global me­dia agency. Fol­low­ing a mul­ti­a­gency pitch pre­sen­ta­tion at Apollo Tyres’ Global Mar­ket­ing Of­fice in Lon­don, Mind­share won the mul­ti­mil­lion dol­lar Apollo Tyres ac­count, which cov­ers both on and off­line me­dia, due to its global reach, along with its fi­nan­cial and or­gan­i­sa­tional fit with Apollo Tyres. Gera Sulin­ska, based out of Mind­share World­wide’s Lon­don of­fice, would be the Global Client Lead for Apollo Tyres. Com­ment­ing on the ap­point­ment of Mind­share, Marco Parac­ciani, Chief Mar­ket­ing Of­fi­cer, Apollo Tyres Ltd said, “While we have been ex­pand­ing across ge­ogra­phies, the need was felt to have a global agency on board, which will fit in strate­gi­cally at a global level, and op­er­ate on both, re­gional as well as global lev­els. We chose Mind­share due to their strate­gic ap­proach and for their com­fort with sports as­so­ci­a­tions, which was nec­es­sary con­sid­er­ing our tie-up with Manch­ester United Foot­ball Club for the In­dian and UK mar­kets.” Gera Sulin­ska, Apollo Tyres’ Global Client Lead at Mind­share World­wide, said “We’re de­lighted to be work­ing with Apollo Tyres to help pro­mote the com­pany around the world. We look for­ward to forg­ing a great part­ner­ship and to help grow their busi­ness through in­no­va­tive and adap­tive mar­ket­ing strate­gies.” Zenith Op­ti­me­dia is the out­go­ing agency, which was ser­vic­ing Apollo Tyres in In­dia.

Apollo Tyres Ltd Apollo House, 7 In­sti­tu­tional Area, Sec­tor 32, Gur­gaon 122001 In­dia Tel.: +91 124 2721000 Web: http://www. apol­lotyres.com/

Onkar Singh Kan­war, Chair­man

Neeraj Kan­war, Vice Chair­man

& Man­ag­ing Di­rec­tor

Prod­uct - Apollo Tyres

Roy Armes, CEO,

Cooper Tyres

Prod­uct - Apollo Tyres

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