MEGA TRENDS TO AFFECT CONSUMERISM

Parag Satpute,
Managing Director,
Bridgestone India.

Parag Satpute, Managing Director, Bridgestone India spoke exclusively to Ramamurthy Mayavan about his plan for initiating continuous growth of the Company in India.

You have recently taken the mantle of Bridgestone. What are your immediate plans and in the long term what are the goal set for the growth of the company?
Parag Satpute: My broad plan is to set up all the strategies / initiatives necessary to promote continuous growth of Bridgestone India's operation through a balanced approach for volume, profit and market share. The India economy is growing at a fast pace and from a mid-to-long term perspective, Bridgestone India must be ready to capture the opportunities being offered in this rapidly growing market. We know that the business environment is evolving and Bridgestone will continue to evolve quickly. We must become an agile and dynamic organization capable of understanding, meeting and exceeding the end-users requirements by offering products and solutions that bring added-value.

Bridgestone has over two decades of presence in India. How do you rate your journey so far? And also tell us the contribution from your side in the Indian tyre industry?
Parag Satpute: To date, Bridgestone India's journey has been quite positive. Since its establishment in 1996, we have started the production of our first tyre here locally in Kheda and our presence in this market has been continuously growing up to the point that in 2013 we began operations of our second tyre plant located in Pune. In line with the growth of our business operations, our commitment to local society is also becoming stronger, including but not limited to, in the areas of safety, health and disaster prevention, human rights, quality, environmental accidents and corporate social responsibility. Bridgestone is convinced that unless we are faithful and dedicated to continuous improvement in these areas, we will not gain society's permission to continue or expand our business domains.

What has been your performance in the last two quarters and how do you expect to end this fiscal?
Parag Satpute: The fiscal year 2016-2017 has been tremendous for Bridgestone India. As planned, we witnessed steady growth and continue to be the leading tyre brand in the Indian market. We also introduced new products in the market, such as our flagship Potenza S001 and Turanza T001 tyres, along with launch of our motorcycle tyre, Neurun. Last year, our key launch was Firestone, the legendary American brand of tyres. Firestone is targeted at customers who are value-seeking but yet demanddependable products with great quality.

This year, despite the challenging and dynamic market, will be another excellent year for Bridgestone in all tyre categories, especially with the introduction of fuel-efficient products. Our objective is to achieve steady growth by finding innovation solutions and overcoming challenges and continue to be the market leader in our industry. In terms of sales performance, Bridgestone India aims to outpace market growth.

How do you look at the potential from the transportation sector and what are the growth drivers? What is the market share that you have in the transportation segment especially for trucks?
Parag Satpute: In the transportation sector in India, we have observed several trends. They are:

Fleet Consolidation:
The transportation sector is undergoing consolidation, where small fleet operators are merging with large fleet operators. This is due to the challenges faced by players in the core sectors of the transportation segment, such as agriculture, mining, consumer durables, cement, etc. However, as the Government is placing extra thrust on the economy, things should improve.

Radialization:
Radialization (the process of shifting from bias towards radial tyres) is a key focus area for Bridgestone India. We see this as one of the key drivers towards the expansion of our footprint in the Indian market. In fact, Bridgestone foresees that the Indian replacement market from 2017 - 2022 will grow by over 15%.
To capture this market growth, Bridgestone has in August 2017 announced our expansion of both our Pune (Chakan) and Indore (Kheda) plants with an investment of USD304.3 million, conducted in a phased manner over the next five years starting 2017. This investment will enable Bridgestone's Indian plants to meet increasing tyre demand owning to the growing vehicle population and production.

The investment by the government towards transportation infrastructure, such as the highway projects, is another factor that we foresee will have a positive impact and boost on the transport segment in India. If these projects go smoothly, we foresee that radialization rates could be even higher.

Bridgestone makes significant investments in R&D and training to ensure that we are both the technology and product leader. While we are unable to provide specific numbers with regards to market share, we are confident that Bridgestone is one of the market leaders in the Indian tyre industry.

Brief us on the range offered by Bridgestone for the transportation segment and what are unique features of your offerings?
Parag Satpute: In India, the transport industry is classified into various operating segments such as the long-haul general cargo, overload, high-load and the intercity bus segment. Bridgestone's products are customized for the Indian market to meet the local road conditions, as well as the fleets' unique operational requirement, such as the M751 premium block tyre for long-haul general cargo and M751HL for the high-load segment. For the intercity bus segment, Bridgestone offers high performance tubeless technology (ECOPIA) which provides good mileage and fuel-savings to fleet operators.

We focus on end-users / customers' requirements and expectations, with the aim of creating added-value through continuous innovation. In doing so, we ensure that products are customized to meet local road conditions as well as our fleet customers' operational requirements. All products have at least 9 months of quality and performance tests prior to market introduction. In addition, innovative solutions are continuously being developed and introduced to meet customers' expectations. Using the latest Internet of Things (IoT) and cloud technologies, we're currently piloting Bridgestone Tirematics Solution for yard management in the Asia Pacific region. This solution utilizes sensor technology to transmit and interpret tyre data in real-time with a high degree of accuracy, to support fleet management while enhancing operational efficiency and promoting safe mobility.

What has been the impact of the roll out of GST on tyre manufacturers like Bridgestone?
Parag Satpute: It has been widely accepted that as an integral part of the logistics and transport industry, the tyre manufacturing sector will benefit from GST and Bridgestone agrees with this view. Initial challenges aside, the new GST regime will be good for Bridgestone - increased movement of heavy commercial vehicles across states will result in an increased demand for tyres. Besides, the elimination of the complex multi-layered indirect taxation system will also simplify processes at our end.

Could you speak about the R&D and where it is heading to? What are the technological trends in the tyre industry in terms of material used / production processes, environment-friendliness, and reducing the carob footprints?
Parag Satpute: The R&D strategy represents a key element of the value chain for our business in the Asia-Pacific region. The recently established Asia-Pacific Technical Center (APTC) works in full synergy with our Global R&D network that includes the three major R&D Centers that Bridgestone has in the world (Tokyo, Japan; Akron, Americas; Rome, Europe, MEA) to develop both products and solutions that meet and exceed end-users expectations and market requirements, including new regulations.

APTC also works in close synergy with each market to develop raw materials that sustain our competitiveness in the market while fully matching our standards of quality, safety and respect of the environment. We have an aggressive agenda to develop and release new products in each segment of our brand portfolio (Bridgestone, Firestone) and the Company will continue to invest in APTC to expand our R&D facilities in the region, while strengthening our R&D capacity and capability.

Bridgestone Group will continue to advance innovative technologies with a strong commitment to supporting global communities. For example, Bridgestone's Environmental Mission Statement of “To help ensure a healthy environment for current and future generations” is the driving force behind our launch of Ecopia in India. Through Ecopia's unique compounds and cutting-edge technology in tread design, it strikes a balance between fuel efficiency, low rolling resistance, safety and durability, to enable Bridgestone to contribute towards the reduction of CO2 emissions in India, while offering Indian drivers fuel-savings. In turn, these fuel savings moves Bridgestone closer to our long-term environmental vision of achieving 50% reduction in CO2 emissions by the year 2050 and beyond.

It is surprising that Bridgestone has not still have much say in the OTR segment, especially in off-the-road equipment segment. What is your take on this? Could you spell out your road map on this?
Parag Satpute: In October 2015, Bridgestone Corporation announced the establishment of in-house companies in our business for mining and agricultural machinery, to accelerate the global expansion of Bridgestone's solutions business1. This unit will collectively provide multiple product combinations and services within the Group's expertise, such as OTR tires for construction and mining vehicles, conveyer belts, as well as agricultural tyres and rubber tracks. Using these product combinations at the core of its competitive edge, Bridgestone will work to promote a business mode that collectively provides services and IT support, to generate unprecedented new value and contribute to the business operations of our customers.
In India, Bridgestone is consistently delivering premium off-the-road tires to large mining truck manufacturers. Other OTR equipment related to the construction industry mainly focuses on domestic bias-ply products. In addition, Bridgestone has plans to cater to the construction industry with products that have a lower initial cost without compromising on quality.

To what extent Bridgestone has geared up to meet the expected demand for OTR, and also in the radials in terms of capacity enhancement, product and technology upgradation, widening the product portfolio, and backup support?
Parag Satpute: Bridgestone sees growth in the market for PTR products, with demand coming from the mining, construction and port segments. To be prepared for this growth in demand, Bridgestone is ramping up production gradually.

How strong is your presence in the mining trucks and mining equipment segment?
Parag Satpute: Bridgestone has a strong presence amongst quality conscious mining operators, particularly in the segment for 57 inch tyres.

Also brief us on the range offered for earthmoving and material handling equipment segments?
Parag Satpute: As part of Bridgestone's global portfolio of earthmoving and material handling products, we have tyres from 15 to 63 inch, which are applicable for most earthmoving equipment. Within India, at the moment, the maximum size we supply is up to 57 inch.

What are the trends towards application based tyres in the OTR segment, especially in the radials?
Parag Satpute: With regards to application-based tyres in the OTR segment, we observe that the market is gradually shifting towards radialization. However, we foresee that it will take some time before the market full converts to radial tyres.

Is there any more investment / products on the launch pad?
Parag Satpute: In the OTR space, Bridgestone has several initiatives on the horizon. We are looking at:

Hits: 36