We are waiting for the outcome of the investigation and as far as we know, there is no case yet. When rubber prices fell, we did not reduce prices. However, there are other investments involved in tire production, including oil prices, electricity, labor, and so on. It is not just natural rubber. In addition, we live in a competitive environment, so our pricing is a product of competition.

How much will the tire industry’s growth prospects improve due to improvements in the automotive industry?

It’s influential, but not the only element of the story. Commercial vehicle tires make up 40% of the auto plant purchasing market and passenger car tires make up 60%. Clearly, production in the automotive industry has a direct impact on tire demand and production. However, the OEM market represents only a small portion of total tire demand. For trucks and buses, the aftermarket sector accounts for 60% and is driven by national economic activity.

The same is true for passenger car tires, with 40% of tire demand coming from the aftermarket. Thus, while the recovery of the automotive industry is important, it is not the only driver of growth. However, given the positive sentiment and plans of the current government, we believe that GDP will improve, investments will increase and infrastructure spending will rise. All these augur well for the tire industry. The current growth curve has been around 4-5% but the tire industry is expected to grow by 7-8% in the future.

Tire companies have done well in FY2014 and FY2014, 2015 so far as natural rubber prices have fallen below Rs 150 per kg. But rubber prices are also soaring and Thailand has started cutting production. Is the Indian tire giant working on a strategy to eliminate this cyclical factor from its sourcing plans?

Natural rubber is at the heart of this issue, accounting for 35% of all raw materials used in the tire industry. Defending against these global trend-driven variants is not easy. The Indian tire industry covers 1000 Major exporters in multiple markets are directly exposed to global ups and downs. The only way to address this issue is to reduce costs. We have made massive implementations at the industry level, always addressing the cost challenges through plant efficiency, labor productivity and power efficiency. Another factor, of course, is oil. That’s because about 60% of the raw materials used in the tire industry are petroleum-based products. Oil prices are currently weak, but this may not last long. The cycle cannot be completely eliminated.

Rubber manufacturing centers such as Thailand and Indonesia are struggling to contain falling prices, and pressure is mounting on Indian rubber growers. As a result, prices will remain stable as production decreases, but since China is a major factor, I don’t see prices rising much. China consumes 50% of global rubber production and demand is low. Therefore, rubber prices may not rise significantly.

Far from your nephew Ans human Singhania (son of Vinita Singhania, CEO, JK Lakshmi Cements) has been in the top management team for more than four years now after entering JK as part of the top succession plan. When is there a timeframe to take over as Managing Director? As chairman, will you be the chief mentor for the next generation?

I will do it when the time comes (promotion of Anshuman to MD). There is nothing to announce yet.