Apollo Tyres announces three year partnership with Manchester United
(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,
Product - Apollo Tyres