35107540 krupa falcon tyre project (1)

Falcon Tyres Limited

Padmashree institute of management and sciences


INTRODUCTION

In India, tyre industry has seen a major revolution due to spurt in Automobile

sector. The tyre industry is a raw material intensive industry. Raw materials accounts

for about a 55% of the total production cost. Two of the 4 major raw materials used in

tyre marketing (i.e. Nylon tyre cord and synthetic rubbet) are petroleum based

derivatives. In India the ratio of Synthetic rubber to natural rubber in the profile of raw

material consumption is approximately 20:80, which stands in sharp contrast to the

ratio if 70:30 for developed countries. Natural rubber is more resistant and is therefore

more suitable to Indian road conditions.

The Indian tyre industry is made up of 16 major players and 13 minor players,

which amounts to Rs. 9000 crores business. There are more than 34 plants located all

over India. This industry depends on the agricultural and industrial performance of the

economy, transportation and production of vehicles.

MAJOR KINDS OF RAW MATERIALS USED IN TYRE INDUSTRY:

The major raw materials and their weight age in the total raw materials cost

structure are:

1. NATURAL RUBBER:

It is the most important raw material used in the manufacture of tyres. Natural rubber

accounts for about 40% (by weight) of the total raw material requirement in the

manufacture of a tyre. The productivity of natural rubber in India is highest in the

world, but still India face shortage of natural rubber produced in the country.



2. SYNTHETIC BUTADIENCE RUBBER:

It is one of the major kinds of raw materials. It contains three types of rubber namely:

a. Styrene Rubber:

It is manufactured from petroleum feed stock. It is used in Car, Jeep. Tyre

industry alone consumes about 50% of total quality of this kind of rubber.

b. Poly Butadiene Rubber:

It is manufactured from petroleum feed stock. It is mainly used in heavy duty

tyres. Tyre industry consumes 80% of total rubber.

c. Butyl Rubber:

It is a synthetic rubber mainly used for making inner tubes in tyres. It is vital to

the durability of the tyres because of its ability to hold air better than natural rubber,

which in turn results in better performance and longer life of tyres.

3. CARBON BLACK:

It is Petroleum based unorganised chemical in the form of quasi – graphite

powder of extreme fineness and with high surface area composed essentially of

elemental carbon. The main input required in the manufacturing of carbon black is feed

stock. Carbon black is divided into soft grade and hard grade. In India carbon black

used is of N660, N220 and N330 variety.

4. NYLON YARN / FABRIC / TYRE CORD

Nylon tyre cords are an essential reinforcement material weightage of Nylon

tyre yarn in terms of cost of raw materials used in the highest at about 27%.

Caprolactum is a major raw materials used in the manufacture of Nylon tyre cord.



To sum up, the tyre industry is highly raw-material intensive, with raw material

costs accounting for 70% of the cost of production. The export – import policy allows

free import of all tyres of new tyres and tubes. However, import of retreated tyres either

for use or for reclamation of rubber is restricted. This has led to use tyres being

smuggled into the country under the label of new tyres. Though tyre imports and all

raw materials for tyres except natural rubber are under Open General Licences (OGL)

only import of natural rubber from Srilanka is eligible under OGL.

The profitability of the industry has high correlation with the price of key raw

materials such as rubber and crude oil. They account for more than 70% of the total

cost. The tyre industry is also capital intensive industry as it requires around Rs. 4

billion to set up a radial tyre plant (tyre having fabric layers parallel) and around 1.5 to

2 billion for a cross ply tyres.



INDUSTRY PROFILE

The tyre industry is essentially an automobile ancillary business. The demand

for its products emanates from the OEM, Replacement and Export Market. All these

segments are equally important in terms of volume of business. The tyre industry’s

growth is linked to the growth in demand from vehicle manufacturers and the after

market.

During 2005-06, the growth in production of 2/3 wheelers and the after market

demand were buoyant. Consequently there was a substantial growth in the sales of 2/3

wheeler tyres. Input costs, especially the price of Natural Rubber and Fabric remained

high due to increased demand for tyres in passenger car and commercial vehicle

segments and also export of Natural Rubber.

The tyre industry in India appears to be on the verge of changes due to the

ongoing process of globalization. Some foreign companies are making efforts to

establish a manufacturing facility in India by setting up joint ventures to cater to local

demand as well as for buyback. Indian companies are also stepping up their efforts and

working to capture new markets. Regional trade agreements may also have an impact

on the industry’s future performance and development.

They tyre industry has shown tremendous growth during the year. The 2/3

wheeler industry also witnessed substantial growth in the period under review. There

has been a marked shift in consumer preference away from mopeds and scooters and

towards motorcycles. The motorcycle tyre segment is estimated to grow at 15% per

annum. Given the current economic realities, the industry will witness fierce

competition between companies of varying size and stature, including multinational

companies.



Sector Comments:

Ever since the first Indian tyre company, Dunlop Rubber Company (India) was

incorporated in 1926, the tyre industry has grown rapidly and today it is a Rs. 9,000

crore industry. India has 2.61 lakh villages, connected by 6.23 lakh kms of metalled

roads and 9.81 lakh kms of unmetalled roads. These villages are linked to small towns

and cities. There is a daily traffic of over 4.12 lakh trucks, 1.27 lakh buses, 7.23 lakh

cars, and thousands of taxix, two-wheelers, three-wheelers, tractors and animal – drawn

vehicles on Indian roads. There exists a vast potential for the tyre industry in India. The

fortune of the tyre industry depends on the agricultural and industrial performance of

the economy, the transportation needs and the production of vehicles. Hence, this is a

very sensitive industry, which has to adapt itself to a highly volatile environment.

Market Profile:

While the tyre industry is mainly dominated by the organized sector, the

unorganized sector holds sway in bicycle tyres. The major players in the organized tyre

segment consist of MRF, Apollo Tyres, Ceat and JK Industries, which account for 63%

of the organized tyre market. The other key players include Modi Rubber, Kesoram

Industries and Good Year India, with 11 percent, 7 percent and 6 percent share

respectively. Dunlop, Falcon, Tyre Corporation of India Limited (TCIL), TVS-

Srichakra, Metro Tyres and Balkrishna tyres are some of the other players in the

industry. MRF, the largest tyre manufacturer in the country, has strong brand equity.

While it rules supreme in the industry, other players have created niche markets of their

own.



Sector Specifics:

The tyre industry is a major consumer of the domestic rubber production.

Natural rubber constitutes 80 percent of the material content in Indian tyres. Synthetic

rubber constitutes only 20 percent of the rubber content of a tyre in India. World wide,

the ratio of natural rubber to synthetic rubber is 30:70. Apart from natural and synthetic

rubber, rubber chemicals are also widely used in tyres.

Most of the RSS-4 grade natural rubber required by the Indian tyre industry is

domestically sourced, with only a marginal amount being imported. This is an

advantage for the industry, since natural rubber constitutes 25 percent of the total raw

material cost of the tyres.

The two types of synthetic rubber used in tyres are Poly Butadiene Rubber

(PBR) and Styrene Butadiene Rubber (SBR). The former is used in most of the tyres,

while the latter is mainly used is the radials for passenger cars. Synthetic rubber

accounts for 14 percent of the raw material cost. Unlike in the case of natural rubber,

India imports 60 percent of its synthetic rubber requirements.

Apart from rubber, major raw materials are Nyloy tyre cord and carbon black.

The former is used to make the tyres strong and impart tenacity to it. The latter is

responsible for the colour of the tyre and also enhances the life span of the tyre. Nylon

tyre cord comprises 34 percent, while carbon black accounts for another 13 percent of

the raw material cost. In India, the carbon black used is of the N660, N220 and N330

variety.



Sector Trends:

Crossply tyres have been used in India for several decades. In these tyres, the

ply cords run across each other or diagonally to the outer surface of the tyre. Rayon and

Nylon tyre cords are used as the reinforcing medium. These tyres can be retreaded

twice during their lifetime and are hence preferred by Indian transport operators who

normally overload their trucks. A vehicle with the normal carrying capacity of around

12 tonnes is usually loaded with double the capacity. Moreover, one also has to contend

with the bad suspensions and bad road conditions. No wonder, 95 percent of the tyres

used in India are crossplies.

Radial tyres have their cords running radially from bead at 90 degrees angle to

the rim or along the outer surface of the tyre. The reinforcing mediums used in these

tyres are polyester, Nylon, fiberglass and steel. Hence, these tyres are 20 percent more

expensive than the crossplies. But they have a longer life and provide lower fuel

consumption. The unhealthy condition of the Indian roads has resulted in radial tyres

accounting for only 5 percent of the tyre industry as against a global trend of 60

percent. With two-thirds of the capacity of all major tyre manufacturers being reserved

for radials, this is a real cause for concern.

Outlook:

Globally, the OEM segment constitutes only 30 percent of the tyre market,

exports 10 percent and the balance from the replacement market. In India, the scenario

is quite different. Nearly 85 percent of the total tyre demand in the country is for

replacement. This anomaly has placed the ret readers in a better position that the tyre

manufacturers. Retreading is looming over the tyre industry as a colossal threat. The

Coimbatore Based Elgi Tyres and Tread Ltd., the largest retreader in India, is giving

the tyre barons sleepless nights.

Simply put, rethreading is replacing the worn-out tread of the old tyre with a

new one. The popularity of rethreading stems from the fact that it costs only 20 percent

of a new tyre but increases its life by 70 percent to 80 percent. Most of the transporters

in India retread their tyres twice during its lifetime, while a few fleet owners even

retread thrice. In their zealousness to economise costs, they overlook the reality that



retreading reduces the quality of the tyre. It is highly popular in the South unlike in the

North where the transporters overload their trucks and have to ply their vehicles in a

rough terrain and environment in which buying a new tyre is the best option. Though

retreading has penetrated 25 percent of the tyre market, it has not made of a dent in the

rapidly growing two-wheeler and passenger car segments.

The industry, already bogged by over capacity, is facing a severe threat of

dumping of cheap tyres by South Korea. Under the Bangkok agreement, signed

between India and South Korea in 1976, import of tyres from the latter into India would

attract a concessional duty of 33 percent as against the normal tariff of 40 percent.

Two years ago, the industry estimated the growth in the passenger car radial

demand at 20 percent per annum. However, the auto recession has hit them badly. But

South Korea made a killing by dumping cheap car radial tyres and walked away with

11 percent of the tyre market.

Another threat to the industry is the price of its raw materials, most of which are

petroleum by-products. Carbon, synthetic rubber and nylon tyre cord are offshoots of

petrochemicals. Thus, the future of the industry will swing with the supply of crude oil.

The biggest threat, however, is yet to fully materialise. It will be from global

majors like Bridgestone and Michelin, which control 36 percent of the global tyre

market. These players have set up their bases in Southeast Asia and the slump of the

markets in this region, coupled with the vast growth potential of the Indian market, is

beckoning them towards India. Bridgestone has tied up with ACC for a 100 percent

radial tyre unit and Michelin is also marketing its products through retail outlets. The

industry is driven more by volumes than by margins and each of the big five in the

global tyre industry Continental, Michelin, Good Year, Pirelli and Bridgestone generate

an annual tyre production equivalent to the total demand of the Indian market. These

MNC’s have deep pockets and can easily withstand losses for 2 – 3 years. Theirs

financial muscles also permit them to invest in R and D, which is beyond the reach of

the average Indian tyre Manufacturer.



GROWTH AND DEVELOPMENT OF THE INDUSTRY

The history of Indian tyre industry can be bifurcated into following periods such

as,

1920 – 1935 Multi National trading in tyre1936 – 1960 Multi National manufacturing eras1961 – 1974 Entry of Indian Companies

1975 Onwards broadening of production base

Trading of tyres started in 1936 by DUNLOP in India after setting up of plant at

Sangria (West Bengal). During 1960 – 1975 many tyre industries were set up. Among

them the leading companies were Good Year, MRF, General Tyre Company, CEAT

Tyre, Modi rubber, JK Industry, Apollo tyres.

A) CONSERVATION OF ENERGY

(a) Energy Conservation / Modification measures taken.

1) Introduction of Air Booster.

2) Development of Auto Centering System (In-House) for 36” Calendar

3) Automization with Devon bias cutter system with PLC and Servo

Drive.

(b) Impact of measure taken.

1) Increased efficiency in compressed air utilization.

2) Reduction in scrap and consistency in quality of products.

3) Consistency in output, reduction in down time and improvement in

productivity with quality.

(c) Additional Investments / Modifications Proposed

1) Implementation of Cogen.

2) Water Management

3) 68” Calendar Automization

(d) Impact of proposed measures

1) Savings in Power and Fuel Cost



2) Savings in Brought out Water Cost

3) Improvement in Quality of Products, reduction in scrap generation and

reduction in down time.



COMPANY PROFILE

Incorporated in 1973, FALCON TYRES located in Mysore, Karnataka State, India, is a

part of Mr. P.K. Ruia Group, Falcon Manufactures and markets a wide range of Nylon

Bias Ply Tyres (which includes) Low aspect ratio of varying Load Index, Uni-

Directional tyres, Tube less 2 tyres (Scooter) and butyl tubes for two and three

wheelers, passenger cars, jeep, light commercial vehicles and farm vehicles, under

‘DUNLOP’ brand for the domestic market and ‘FALCON’ brand for overseas market.

Falcon is the preferred choice of all leading vehicle manufacturers.

In India like

• Bajaj Auto

• Yamaha Motors

• Escorts

• Hero Honda Motors

• Majestic Auto

• LML

• Kinetic Engineering

• Kinetic Motor Company

• Royal Enfield Motors

Falcon tyres Limited global operation include exporting tyres to Bangladesh, Sri

Lanka, Peru, Nepal, European countries, etc.

Falcon tyres meets ISO, BIS, JIS and T & RA AIS 044 and ETRTO standards wherever

applicable. Falcon’s R & D center is engaged in upgrading the product performance,

quality and introduction of new products. Falcon’s aim is to give satisfaction to its

customers by offering High quality and Cost effective Tyres and Tubes.



Quality Accreditations

• Dot Marking for all 2 & 3 wheeler sizes for export to USA.

• ECE Marking for Export to European countries.

• DGS & D Certification for all 2 & 3 Wheeler sizes for supply to Government

organizations.

• Falcon has got ISO 9001:2000 & TS 16949 : 2002

The company has also received Certificate for ISO 14001 : 2004 and OHSAS

18001 : 1999 from M/s. TUV SUDDEUTSCHLAND INDIA PVT. LTD., during the

financial year.

The Company supplies to al the major OEM’s directly from the factory. The

Replacement Market is catered to through the C & F Agents established all over the

country. The Export market is directly handled from the factory at Mysore. The

Company’s brand “DUNLOP” has enabled the company to withstand the severe cut

throat competition from other tyre companies to a great extent.

A) Company’s Philosophy on Corporate Governance:

The company believes in the philosophy of continuous improvement in all

facets of its operation. Budgets, investment proposal significant developments are

placed before the Board. Committees such as Audit. Share Transfer, Remuneration and

Investors Grievances Committee meet regularly to consider aspects relevant to each

committee. The Company’s existing practice and policies are in conformity with the

requirements stipulated by Securities and Exchange Boards of India (SEBI). The

Company has committed itself to continue providing the best service to its investors

and also to instill pride of the long term association with the Company among its

members.

SEBI revised the Clause 49 of the Listing agreement that deals with the Corporate

Governance and made the same applicable from 1st January, 2006. The company has

already started implementing the revised provisions of Clause 49. The Boards has

adopted a code of Conduct and made it applicable to all the members of the Board and



to all General Managers. The Company has also posted the Code of Conduct on its

website.

B) Board of Directors

In terms of the Company’s Corporate Governance Policy, all statutory and other

significant and material information are placed before the Board of enable it to

discharge its responsibilities of strategic supervision of the Company and as trustees of

stake holders.

The Board has adopted a Code of Conduct for Directors and all the General

Managers and above, and a declaration has been obtained from the Managing Director

about its Compliance.

The Board meets atleast once in a quarter to review the Company’s

performance and financial results and more often, if considered necessary, to transact

other business.

The Board of Directors of FTL consists of

1. Mr. P.K. Ruia

2. Mr. A. Sadasivam

3. Mr. Prakash .M. Nene

4. Mr. S. Badrinathan

5. Mr. Tarun Gandhi

6. Mr. Ambuj Kumar Jain

The Managing Director of FTL is Mr. A. Sadasivam



C. Audit Committee

The Audit Committee is headed by Mr. P.M. Nene who is the Chairman of the

committee. There are two members Mr. S. Badrinathan and Mr. Ravindra Pal Bhatia.

Mr. S. Badrinarayanan is the Secretary of the Committee.

The functions of the committee are given below:

a) Review the Company’s financial reporting process.

b) Review of half yearly and annual financial statements, before submission to the

Board.

c) Review with External Auditors, on areas of concern.

d) Recommending appointment of External Auditor and fixation of audit fees.

e) To ensue compliance of internal control system and action taken on internal audit

report.

f) To review the Company’s Financial and Risk Management Policies.

g) To appraise the Board on the impact of accounting policies, accounting standards

and legislation.

h) Review of reasons for default in payment to shareholder / creditors etc.

i) Review the adequacy of internal audit function.

j) To hold periodical discussions with statutory auditors on the scope and content of

audit.

C. Remuneration Committee

The Remuneration Committee determines and fixes remuneration to executive

Director and Managing Director. The remuneration to the Managing Director and the

Executive directors had been determined considering the prevalent remuneration for

managerial personnel of Companies of similar size and stature.



D. Investors / Shareholders Grievances Committee

The committee is headed by Mr. A. Sadasivam. The committee has other

members namely Mr. S. Badrinathan and Mr. P.M. Nene.

The committee looks into redressing the grievances of the investors namely

shareholders. The committee deals with grievances pertaining to transfer of shares, non

– receipts of Balance Sheet, non – receipt of dividend, dematerialization of shares,

complaint letters received from Stock Exchanges, SEBI etc.

During the year, one complaint was received from a shareholder and the same

has been resolved to the satisfaction of the complaint and no transfer was pending as on

31st March, 2006.

Competitors Information:

MRF:

A leading company in the tyre industry, MRF Ltd. Boasts of an enviable track

record. The company has continued in the same vein and has been posting excellent

results, not withstanding the winds of recession blowing across the economy.

Performance of the company has been commendable in light of the fact that the user

industry is facing a slowdown. The company has benefited from better productivity and

operational efficiency. The company caters to a host of impressive clients. It has signed

on to be the sole supplier for auto giants like General Motors, Fiat and Fort in India.

The company is also renowned for its exports, which have also been witnessing

positive growth. The company has recently entered the radial tyre segment and has met

with positive response. The performance of the company could further improve with

the revival of the auto industry. Thus, MRF Ltd. can be expected to retain its position in

this segment. However, investors can move out of the scrip, considering the outlook for

the industry as a whole.



CEAT:

Being the second largest selling brand in India with a market share of 14.6

percent, CEAT caters primarily to the replacement market. Due to the strong growth in

the OEM sector, the share of the replacement market in the total revenue of the

company has fallen. However, the production growth in the automobile sector over the

past few years should provide a boost to the replacement market in the coming years

and CEAT could be a major beneficiary thereof. With the advent of multinationals like

Good Year, Michelin, Bridgestone and Continental, a major shakeout in the industry is

imminent and the same could result in CEAT, which is already operating on thin

margins, being hived off as a joint venture with Good Year, in collaboration with which

CEAT has already promoted South Asia Tyres for manufacturing radial tyres in India.

With a modest track record on the financial front, the forthcoming results may not be

encouraging.

Apollo Tyres Ltd. (ATL)

A slow-down in the trye market and rubber procurement at high prices has put

the brakes on Apollo Tyres Limited (ATL). The company has traditionally been the

market leader in the truck and bus tyres segments. ATL caters to the replacement

segment of the domestic market. Following its take over of Premier Tyres, ATL’s

market share has risen. Besides the core truck and bus tyre business, fairly considerable

part of its turnover comes from automotive tubes and flaps, for which it has

commissioned a plant in Pune. Despite a reversal in the fortune of the automobile

industry, the chief user base of the company’s products, the demand for truck tyres,

particularly in the replacement market, was not encouraging. Even as tyre producers

grapple with over-capacity and high levels of inventory, the government stirred a

hornet’s nest by proposing free imports of used and second-hand tyres. ATL has

conversion agreements for small tyres with TCIL, Stallino Tyres and Rado. Its exports

are routed through Apollo International to the US, Germany, Brazil, Sudan, Egypt, Etc.

A well – entrenched position in the replacement market, favours ATL and the declining

price trend of key inputs like natural rubber and carbon black may provide relief to its

wafer – thin margins. At the current price level the scrip has emerged as an attractive

buy; thus accumulate its shares in small lots.



Achievements / Awards:

• Central Excise has termed FTL as “GOOD PAYERS”.

• Sales Tax Department and the Electricity Boards have given “GOLD CARD” to

FTL.

• The PF Department has termed FTL as “BEST ENTERPRISE”.

• In addition to this Mr. J.A.K. Tareen, the Senior General Manager – HR of

Falcon tyrs limited, has been conferred with RASBIC AWARD 2005 for

Leadership and Life Time Achievement in the field of Human Resource

Management.

• The Falcon family takes pride in the achievement of the Mr. J.A.K. Tareen.

Future Growth and Prospectus:

• To develop wide range of tyres and tubes in two, three and four wheeler and

industrial segments for export market.

• To develop tubeless tyres in two wheeler segment.

• To further introduce advanced technology tyres of directional pattern design

and conventional pattern in Motorcycle segment.

• To further develop hi-tech Low Profile tyres in scootrate segments.

The Company expects that there will be growth in demand for two / three

wheeler tyres and tubes. However the competition will also be severe with

consequential impact on the market share of the various tyre manufacturers as well as

their margins. Rubber and Nylon prices are expected to remain firm in the near term

and hence the tyre companies have to increase prices if they have to show improved

results. The long term outlook continues to be positive for the industry as well as the

company. The company believes that its efforts at new product development, market

development and improving its operations will help it to meet the challenges of the

future.



The Company has embarked on a 600 million rupees expansion plan. The tyre

manufacturing capacity is being raised from 5,50,000 to 7,50,000 per month and the

tube manufacturing capacity is raised from 3,50,000 to 7,50,000 per month.

FTL is case of emergencies goes for Rush Purchase of Stores & Spares. The minimum

and maximum capability of FTL per day is….

MINIMUM MAXIMUMTYRES 20,000 per day 30,000 per dayTUBES 14,000 per day 21,000 per day

Work-In-Progress:

Always FTL maintains one day stock in floor. There are two shifts in

production. Total one and half day of stock is always present.

Finished Goods: The finished goods are dispatched to factory (exports), OE Depots (3),

and Replacement Depots (32).

Transit Period = Minimum Level Maintained * Demand

MILESTONES OF FALCON TYRE LIMITED:



1973 : FTL was promoted by a group of professionals.

1975 : FTL started its commercial production.

1983 : Company starts making losses.

1987 : The company was taken over by Mr. Chhabria a part of

Jumbo group or industries.

1991-1992 : The entire accumulated losses of the company were wiped

off the company carried out on of the most remarkable

turnover in the Indian corporate history.

1992-1995 : FTL expanded its capacity from 2.2 lakhs to 3 lakhs.

1995-1996 : It emerged as the highest profitable company in the Indian

tyre industry with a net profit ratio of over 5%

1996-1997 : It made record by selling a million tyres to Bajaj Auto Ltd.

1997-2001 : FTL expanded its installed capacity from 3.0 lakhs

to 3.5 lakhs.

2001-2002 : It acquired modern and sophisticated technology from Korea,

Taiwan and UK for producing quality tyres and tubes.

Installed capacity expanded from 3.0. lakhs to 4.5 lakhs

per month for tyres and tubes production.

The turnover of the industry reached Rs. 182.00 crores.

2002-2003 : The turnover of the industry increased to 182.00 crores due

to rise in price of raw materials.

2004-2005 : The turnover of the company increased to 223.95 crores.



The tyre industry is one of the oldest industries in India. The Dunlop introduced the

first tyre manufacturing plant in 1936 at Sangeria (West Bengal), which lead to one of

most important industry in India, which not only provided gainful employment to

Indians, but become one of the major export earner.

The future of the tyre industry depends on the agricultural and industrial

performance of the economy, the transportation needs and the production of vehicles.

Hence, this is a very sensitive industry, which has to adopt itself to a highly volatile

environment.

One of the main reasons for the development of the tyre industry is rubber

industry. It has been established in 1921 with a small unit, but now it has increased to

600 units, 30 large scales, 300 medium scales, and 5600 small-scale industry. They

produce around 35000 rubber products. India is the third largest consumer of synthetic

rubber together in the world.

Most of the rubber produced in India is consumed for making of tyres. This

leads to growth of the tyre industry. The rubber produced in the country is consumed as

the following.

• Automotive tyre sector – 50%

• Bicycle tyre and tubes – 15%

• Foot Wear – 12%

• Belts – 06%

• Camelback and latex Products – 07%

• Remaining Rubber – 10%

India’s with availability of basic raw materials is in abundance, availability of

cheap labour, technically skilled manpower and a vast domestic market, is ideally

posed to supplement and complement overseas manufactures through joint

collaboration to contribute substantial to the world trade of rubber products. This is

major reason for origin of tyre industry in India.



POWER & FUEL CONSUMPTION

2005-2006 2004-20051. Electricity a. Purchased - Total Units 10560009 9760383 - Total Amount (Rs. In Lakhs) 506.62 470.31 - Rate per unit (Rs.) 4.80 4.82 b. Own Generation - Units Generated 18787 398345 - Units per Ltr. Of Diesel 3.09 3.08 - Cost per unit (Rs.) 9.22 8.732. Furnace Oil - Total Quantity (KL) 3782 3643 - Total Cost (Rs. In Lakhs) 643.36 453.39 - Rate Per Litre (Rs.) 17.01 12.45

1. Consumption per kg. of Prod of Tyre & tube - Electricity (Units / Kg.) 0.56 0.57 - Furnace Oil (Ltrs. / Kg.) 0.20 0.20

Thus from the above illustration the company has successfully implemented its

Shared Value “Conservation of Energy”.

The Falcon Tyres had a shared value of maximizing shareholders wealth and increasing

its turnover.

Therefore Falcon Tyres registered a net profit of 36.3 million rupees compared with

9.2 million in 2004-05. Total Company turnover stood at 2.55 billion rupees against

2.19 billion the same last year. The company announced a 25% dividend for its

shareholders, which was 2.50 Rs. Per share, highest in its history.

SHARED VALUE:

As per the model, “SHARED VALUES” implies “The values that go beyond,

but might well include, simple goal statements in determining corporate destiny. To fit

the concept, these values must be shared by most people in the organization.

Along with this, each department is having its own objectives to be achieved. Some of

the objectives that were implemented during the current year were –



STYLE:

Style refers to the employees shared and common way of thinking anbehaving

unwritten norms of behaviour and thought. In simple words it is the behaviour which an

organization projects to shareholders.

Major Customers of Falcon Tyres

1. Baja Auto Ltd. Akrudi, Pune

2. Bajaj Auto Ltd. Waluj, Aurangabad

3. Bajaj Tempo Ltd. Akrudi, Pune

4. Hero Honda Motors Ltd. Gurgoan

5. Majestic Auto Ltd. Ghaziabad

6. Royal Enfield Motors, Chennai

7. LML Limited, Kanpur

8. Yamaha Motors India Pvt. Ltd. Faridabad

9. Kinetic Engineering Ltd. Pune

10. Piaggio Greaves Ltd. Baramati

11. VST Tillers & Tractors Ltd. Bangalore

COMPANY SECRETARY Mr. S. BadrinarayananREGISTERED OFFICE Gold Towers,

50, Residency Road,

Bangalore - 560025FACTORY Metagalli, K.R.S. Road

Mysore - 570 016BANKERS 1. Syndicate Bank

2. Punjab National Bank



3. State Bank of IndiaAUDITORS M/s. Lodha & Co.,

14, Government Place (East)

Calcutta – 700 001

Ownership Pattern:

Shareholding pattern as on 31st March, 2006

No. of Equity Shares Held

Percentage of Shareholding

A. Promoter’s Holding

1. Promoters

Indian Promoters

Foreign Promoters

331614

3918850

5.84

68.98



2. Persons acting inconcert - -Sub – Total 4250464 74.82B. Non-Promoters Holding

3. Institutional Investors

a. Mutual Fund and UTI

b. Banks, FI’s, Insurance Companies

C. FII’s

-

-

-

-

-

-Sub - Total - -4. Others

a. Private Corporate Bodies

b. Indian Public

c. NRI’s / OCB’s

d. Any other

655512

767074

7872

-

11.54

13.50

0.14

-Sub – Total 1430458 25.18Grand Total 5680922 100.00

TOP DOWN, AUTHORITARIAN IN FALCONTYRES LTD



TOP DOWN, AUTHORITARIAN

The Managing Directors and Vice – Presidents are the top level decision makers. Their

decision should always de approved by the Board of Directors. The general managers

and managers are medium level decision processors. They supply needed information

to the top level so as to pave the way for efficient decision making by managing

directors and Vice – Presidents. The lower level consists of Officers who are

management supervisors. The workers and the labor force report daily to the Officers.

The decision regarding permanent (Experienced / Skilled) and trainees, apprentices,

casuals (Skilled / Unskilled) workers laborers is taken by the officers. All the levels of

the organization report through MIS.

PRODUCT PROFILE

In India two kind of tyres are manufactured


BOD

Managing Director &

Vice Presidents

General Managers &

Managers

OfficersWorkmen / Laborers

Permanent (Experienced / Skilled)Trainees, Apprentices, Casuals (Skilled / Unskilled)


1. Crossply tyres

2. Radial tyres

In India Crossply tyres have been used for several decades. Rayon and Nylon

tyre cords are used as the reinforcing medium. These tyres are retreated twice, during

their lifetime and are hence preferred by Indian transport operators who normally

overload their trucks. A vehicle with the normal carrying capacity of around 12 tonnes

is usually loaded with double the capacity. 95% of the tyres used in India are cross plies

because it can with stand bad road conditions.

Radial tyres have their cords running radically from bead at 90 degrees angle to

the rim or along the outer surface of the tyre. The reinforcing mediums used in these

tyres are polyester, nylon, fiberglass and steel. Hence, these tyres are 20% more

expensive than the crossplies. But they have a longer life and provide lower fuel

consumption. The unhealthy condition of the Indian roads has resulted in radial tyres

accounting for only 5% of the tyre industry as against a global trend of 60%. Two-

thirds of the capacities of all major tyre manufactures use radials.

Retreating is mostly done in India. It is replacing the worn-out thread of the old

tyre with a new one. The popularity of retreating stems from the fact that it costs only

20% of a new tyre but increases its life by 70% to 80%. It is highly popular in the

South unlike in the North where the transporters overload their trucks and have to ply

their vehicles in a rough terrain an environment in which buying a new tyre is the best

option. Though rethreading has penetrated 25% of

The tyre market, it has not made much of a dent in the rapidly growing two –

wheelers and passengers car segments.

ORGANIZATION STRUCTURE



Organization structure refers to the basic hierarchical procedure In which

the organization carries out their business and accompanying Baggage that shows

tasks are divided and integrate

Pascale and Athos in their book “The Art of Japanese Management” says that

“Organisation Structure emphasizes that the quality of management depends on the

goodness of which amongst all those key managerial dimensions”.


Board of Directors

Managing Director

Marketing

VP OperationVP OperationVP Operation

FinanceProduction

Board of Directors

Managing Director

Marketing

VP OperationVP OperationVP Operation

FinanceProduction

Quality Assurance

Expansion

Diversification

Modification

Accounts

Costing

Commercial Accounts

Systems

Secretarial Dept

Purchase

Engineering & Planning

Stores

Institutional Marketing

Human Resources

Technical Engineering


OFFICER AND DIRECTORS

Name Current Position

Badrinarayanan, S.Vice President - Finance, Compliance Officer,

Company SecretaryGandhi, Tarun Non-Executive DirectorJain, Ambuj Non-Executive DirectorBhansali, Sunil Executive DirectorRuia, Pawan Executive Chairman of the BoardPrithviraj, Kokkarne Additional DirectorRavi, S. Additional Director


http://www.reuters.com/finance/stocks/officerProfile?symbol=FLTR.BO&officerId=1281248








DEPARTMENTAL ANALYSIS

• FINANCE:

• OPERATIONS

• MARKETING

• PRODUCTION

• TECHNICAL

• HUMAN RESOURCE

• INFORMATION SYSTEM



FINANCE DEPARTMENT :

The Finance department is headed by Mr. S. Badrinarayanan who is also the

company secretary, who is in charge of whole finance department.

The department is sub-divided into:

1. Finance

2. Accounts

3. Costing

4. Commercial Accounts

5. Secretarial Department

6. Purchase (Capacity – Availability – Utilization)

These are headed by Deputy General Manager’s (DGM’s) of respective sub

departments.

In Addition, Finance department consists of other executives like Deputy

Manager Costing, Assistant Manager and Secretarial Manager – Systems and related

officers and Trainees. All are having reporting relationship to VP (Finance) or DGM

(Finance).

The key functions of Finance department are:

I) Arrangement of Finance

II) Maintenance of Accounts

III) Cost Analysis

IV) Cost Cutting Methods

V) Receipts and Payments

VI) Preparation of P & L Account, Balance Sheet

VII) Internal Auditing

VIII) Verification of C & F Agent activities

IX) It acts as liaison for banks.



OPERATIONS DEPARTMENT:

Personal Department:

Human Resource department controls over 3 main areas:

2. Human Resource

3. Public Relation

4. Personnel Department

The major functions of personnel department are:

a) Recruitment

b) Selection

c) Training and Development

d) Induction

e) Manpower Planning

f) Deployment

g) Absenteeism

h) Demands

i) Motivation

j) Welfare Measures (Canteen and Fringe Benefits, Ambulance)

k) Spoke person of the organization



TECHNICAL DEPARTMENT

The functions of technical department are as follows:

I. Tyre design and development

II. Issuing of processes for manufacturing of compound, fabric, bead tyre tube.

III. Testing of tyres to meet various mandatory requirements.

IV. Raw material specification (Rubber, Nylon, Carbon Black, Beadwire etc)

V. Maintenance specification of manufacturing process at the shop floor.

VI. Passing of compound of fabric for manufacturing process.

VII. Isolation of rejected batches and their disposal.

VIII. Approval of vendor and development of new sources.

IX. Setting of acceptance standards for market.

X. New tyre manufacturing.

XI. Interface with Original Equipment Manufacturers.



PRODUCTION DEPARTMENT

I. Capacity

II. Availability

III. Utilization

FALCON MANUFACTURING PROCESS:

Workers work in three shifts i.e.

First Shift : 7.00 a.m. to 3.00 p.m.

Second Shift : 3.00 p.m. to 11.00 p.m.

Third Shift : 11.00 p.m. to 7.00 p.m.

General Shift : 9.00 a.m. to 5.00 p.m.

1. Raw Materials Section: Procured from Russia, Mangalore, Kerala etc., About

7.5 lakhs tons per month are bought.

2. Mixing process or Master compound: Removal of FM portion from strange

stock of tube. Compound during mesh change. After the green tubes are made

out of Nylon thread, rubber coating is made on both side of Nylon thread known

as fabrics.

3. Cooling of the tubes and Bias cutter is done for tube extension. Here awlholing

and punching is made by converting green tube into an air bag known as PCI

curing. After filling of chalk powder and valve fixing.

4. VMI Splicing Machine: To overcome weak splicing knife current has been

altered.

5. For curing chalk powder is used

External Temperature 190 + or – 2 degree centigrade

Performed periphery in mm – 184

Size 3.50 – 10C



Internal temp – 185+ or – 2 degree centigrade

Total curing time in seconds – 185

Inflation time – in sec – 165

Drain and Vaccum time – 20 secs

6. In the whole tube process straining compound is used which is chalk powder.

7. Bladder: Tyre shaping cover – washers are fixed.

Tyre Processing Plant:

• Compound mixing → Output → Dumping mill → Conveyor sheet from

1 batch 56 Kgs.

• Mixing Quality: Chemical mix → such as Carbon, Sulphur, Nylon

threads, latex, Ammonia, etc., are used

• Beading → Thread → Compound

• Nylon Role fabric coating : compressing

• Nylon Coating process GT – 38 – Tube.

Mainly tyres are for: Two wheelers – Bajaja Scooter,

Three wheelers – Auto

Four wheelers like Tractor, 407 Tempo, Maruti Car, ADB Bullock Cart

• Moulding is done later

• Stensils are fixed → Manufacturing date

• TWI → Trade Mark.

8. After Tyre manufacturing is will be pilled up in store room according to their

sizes.



AN OVERVIEW OF MANUFACTURING PROCESS

The tyre manufacturing process

In general the tyre manufacturing process takes place in the following way:

1. Mixing the materials:

Various grades of natural and synthetic rubber are combined with carbon black,

sulphur and chemical products in an internal mixer to meet specific compound

requirements. The resulting blend is called the “Master batch”, which is formed into

rubber sheets, and cooled. Some rubber is used for additional processing while the

majority is prepared for the extruding stage.

2. Extruding the tread:

Heat is applied to the rubber to make it more elastic and then it is put through

extruders machines where the tread and sidewalls, which require two different rubber

compounds, are formed into the required shapes. The extrudes produce a continuous

sheet of tread rubber, which is then cooled and cut to specific tyre lengths.

3. Weaving the piles:

Spinning cords such as rayon, nylon, steel and polyester undergo a process

called “Calendaring”, where they are woven into sheets and coated with rubber on both

sides. Once this is finished, the sheets are then cut at the proper angle into specific

widths and lengths and eventually used for casing and cap plies, while steel cords are

used for the belts.

4. Preparing the bead core:

The bead core is formed by aligning, and then coating plated steel wires with

rubber. After, it is wound on a coil a certain number of times to form bead rings, which

provide a specific diameter and strength for a particular tyre.



5. Building process:

The process involves two stages.

Stage 1: Beginning with the woven sheets, the inner liner, body plies and sidewalls are

placed on the building drum. The correctly – positioned beads rings are then attached,

which results in the automatic wrapping of the ply edges around the bead core, and the

simultaneously movement of the sidewalls into position.

Stage 2: The tyre is shaped by inflating the rubber and applying side tread rubber, two

steel belts and a cap ply to achieve a “green” tyre.

6. Vulcanization:

The “green” tyre is placed in a curing press for a certain period of time (10-15

minutes) at a specific pressure and temperature. Once heat and pressure has been

applied to the tyre, it is then removed from the mould having achieved its final size,

shape and tread pattern.

7. Trimming:

Excess rubber from the curing process is removed, and the tyre is trimmed to

order.



FLOW CHART FOR TYRE PROCESSING


Thread

extension65’’ Calendar Bead

winding

insullationca

lendar

bias cutter

MASTER COMPOUND

FINAL COMPOUND

Tyre building

painting

awlhoing

Tyre curing

finishing

Finish foods


FLOW CHART FOR TUBE PROCESSING


MASTER COMPOUND

FINAL COMPOUND

STRAINING

TUBE EXTENSION

VALVE FIXING

SPLICING

TUBE CURING

FINISHING


Each tyre is visually and electronically inspected for balance, quality and uniformity.

This final check ensures consistent and reliable performance.

Quality Policy:

We at Falcon Tyres Ltd., are committed to supply quality Tyres, Tubes and

Flaps on time to achieve fullest customer satisfaction.

We will achieve this by providing training to all levels, continually improving

the systems and processes.

INVENTORY CONTROL SYSTEM:

The inventory in FTL consists of

1) Raw Materials

2) Stores and Spares

3) Semi Finished / Work-in-Progress

4) Finished Goods.

Raw Material:

The raw material used in the manufacture of tyres is natural rubber. The

company gets this natural rubber from Kerala. The transit period is 3 days. The stock

period is 7 days means the company will always have 7 days worth stock of raw

material natural rubber.



The raw material used in the manufacture of tubes is synthetic imported rubber. The

transit period is one month and stock period is 15 days.

The issue to production is by First In First Out (FIFO) method.

The storage of raw materials is classified into ‘ABC’

A - Good Quality, B – Medium Quality, C – Poor Quality.

Minimum required days of stock for Indian raw materials = (availability with vendor) –

Transit period)

Minimum quality shipment of raw materials for tubes to be imported by is bonded with

customs = (availability with vendor) – (transit period)

Stores & Spares:

This consists of other raw materials like fabric, carbon black, chemicals

(Sulphur), bead wire (copper), Consumables, spare parts, packaging material, etc. This

is maintained at three levels:

1. Minimum Level - Movements.

2. Medium Level - Delay in order.

3. Maximum Level – No further order.

STORES

I. Opening Stock

II. Receipts

III. Issues

IV. Closing Stock



MARKETING DEPARTMENT

The functions of marketing department are as follows:

I. Advertising

II. Campaigning

III. Sales Promotion

IV. Estimation of Sales

V. Analysis of customer satisfaction

VI. Formulation and implementation of strategies (Since derived demand,

demand depends on dealers and mechanics)

VII. Liaison to customers.

VIII. Appointment and Maintenance of C & F Agents (Representatives)



Marketing department also involves marketing the finished goods to

I. OEM (Direct and 3 Depots)

II. Replacement (32)

III. Export (Bangladesh, Sri Lanka, Nepal, Peru).

STRATEGY

According to McKenzie’s 7 S Model, strategy can be defined as “A coherent set

of actions aimed at gaining a sustainable advantage over competition, improving

position vis-à-vis customers, and allocating resources”.

MARKETING STRATEGY:

The Falcon Tyres Limited follows an aggressive marketing strategy. It uses a

wide variety of strategies to create awareness about its products. It deploys the right

mix of strategies from its armory to help in generating the right perception about its

products. Some of the key marketing strategies followed by FTL are

1. Institutional Marketing:

FTL visits various institutions where a large number of two/three wheeler

vehicles are parked. There they offer free emission tests. The person offering the

emission test will have a logo of “Dunlop Tyre” on is t-shirt. At the time of emission

test he will explain about the merits of Dunlop tyres in comparison with other tyre

brands. He will also offer free stepney cover for scooters which will also have a Dunlop

logo and its features. In bus stand the people who part their two wheelers are given free

carry bags to carry their luggage. The bag will have a Dunlop symbol and its qualities.

This will help in creating the cognitive component.

2. When the people with two/three wheelers come to petrol bunks for filling up air for

their tyres they are given free key chains, caps, t-shirts bearing Dunlop logo. The



employees of the petrol bunks are also given free caps, t-shirts having Dunlop logo and

they recommend Dunlop tyres to their customers. This helps in creating the affective

component.

3. The FTL goes to local garages which service two/three wheeler vehicles and

distributes the mechanics there and his boys free T-shirts with Dunlop logo and the

FTL will tell the mechanics and his boys to recommend Dunlop tyres for the customers

who come to that local garage.

4. Contest Marketing: The Falcon Tyres conducts a race in Srirangapatna for ADV

(Animal Driven Vehicles) every year.

The volunteers are locally selected and these local volunteers and their kids are

given free T-shirts, caps with Dunlop symbol. Free meals are given for the thousands in

attendance. Free discount-coupons are given for everybody on the purchase of ADV

tyre of Dunlop within one year.

The first, second and third place winners of the race are given cash prize of Rs. 10,000,

Rs. 5000, Rs. 3000 respectively.

5. The customers are given discount as follows:

Payment period for product purchased DiscountWithin one week 5%Within two week 3%Within three week 2%Within one month 1%

Internal Control Systems:

System refers to the procedure through which a particular operation / function is

carried out efficiently in either one of the departments or in the entire

organization as a whole.

The Company has an adequate internal control, designed to provide reasonable

assurance on the achievement of the objectives relating to efficiency and effectiveness



of operations, reliability of financial reporting, compliance to applicable laws and

regulations and for safeguarding assets. The Company’s internal auditors evaluate the

internal control in design and in operation their observations being reviewed by the

Management and the Audit Committee.

Information System:

The implementation of computers has made information flow fast and reliable.

The information is versatile. Since FTL has good backup system. The Company has

adopted and ERP package known as SAP, even though the implementation is not full.

FTL is using it for the extent possible for the flow of information. The software that has

been developed by FTL includes FOXPRO, FINANCIAL PACKAGE, MATERIAL

ACCOUNTING, FINISHED FOODS PACKAGE, etc. which are used for the

processing of the information. The users are well trained at their appropriate levels to

ease the understanding of the

information flow.

HUMAN RESOURCE DEPARTMENT

The Human Resource Department has the following policies.

Employees are given Bonus, attendance award, production incentive (on target

achievement), special pay (Salesmen), medical check ups, etc.

The staff in the FTL will come under human resource department under the

senior general manager. The department is looking after three sub departments, they are

• Human Resource Department

• Personnel and Industrial Relations Department

• Safety and Security Department

HR FUNCTIONS:



A.Managerial functions:

Planning: It is a pre- determined course of action.

Planning pertains to formulating strategies of

programmers and changes in advance that will

contribute to the organizational goal.

Organizing: it is essential to carry out the determined

course of action.

Directing: The next logical function after completing

planning and organization is the execution of the plan.

The basic function of personnel management at any level

is motivating, commanding, leading and activating

people.

Controlling: After the three various activities of personnel

management, the performance is to be verified in order

to know that the personnel functions are performed in

conformity with the plans and direction of the

organization.

B.OPERATIVE FUNCTIONS

Employment: it includes job analysis, human resource planning,

recruitment, selection, placement and induction and orientation.



Human resources development: it is a process of

improving, molding, and changing the skills, knowledge,

creative ability, aptitude, attitude etc.

Compensation: it is a process of providing adequate,

equitable and fair remuneration to the employee. It includes job

evaluation, wage and salary administration, bonus, incentives

etc.

Human Relations: it includes motivating the employee,

boosting employee morale, developing the employee

communication skills, developing the leadership quality etc.

Industrial Relations: it includes Indian labor market,

trade union, collective bargaining, industrial conflicts etc.

Recent Trends in HRM: HRM has been advancing at a

fast rate. It includes Quality of work life, total quality in HR etc.

EMPLOYMENT / RECRUITMENT:

Recruitment is a process to discover the sources of manpower

to meet the requirements of the staffing schedule and to employee

effective measures for attracting that manpower for adequate

numbers, to effective selection of our efficient workings.

POWERS AND DUTIES OF PERSONNEL MANAGER:POWERS:



He is authorized to handle independently.

To appoint the staff members.

Right to dismiss staff members after issuing memos.

His consent is necessary in all personnel matters.

He is the signing authority.

DUTIES:

To maintain salary records.

To keep employees records.

To maintain accident reports.

To look into the claims made by the employees.

To maintain records of provident fund to grant leaves to the

employees.

Attending labor courts.

OPERATIVES FUNCTIONS OF HRD DEPARTMENTS:

Employment.

Training.

Wage and Salary administration.

Welfare Measures.

Promotion.

Sanction of Increments.

Disciplinary action against misbehavior of employees.



Termination and retirement.

Employee’s Attendance.



WAGE AND SALARY:

In FALCONTYRES LTD the pay structure consists of the following components.

Basic wage / salary.

Bonus and other incentives.

Fringe Benefits.

Basic wage is a price for service rendered.

Dearness Allowance:

Dearness Allowance is also known as cost of living allowances. This allowance

is given to protect the real wage on workers during inflation. In this organization the

D.A is fixed on the basis of price index, therefore, the D.A varies yearly. At present,

the D.A., HRA, are also provided by Falcon tyres will not issue any dearness allowance

to employees.

SKILL:

Skills are considered as “One of the most crucial attributes or capabilities

possessed by the organization”. The term skills include those characteristics or

strengths which most people use to describe the Company.

The Company continues to have cordial and harmonious relations with its

employees. In line with the changing business environment, the Company is training

and developing the Human Resources. Several training programmes, structured to the

needs of the individual employee and also to meet the requirement of ISO 9001 : 2000

and ISO / TS 16949 : 2002, ISO 14001 : 2004 and OHSAS 18001 : 1999 quality related

CERTIFICATION, were conducted. Regular audits on safety and environment are



done by competent professional and the recommendations are implemented to provide

a safe and clear work environment. Regular training programmes on safety are

conducted to increase awareness and commitment for safety. The total number of

permanent employees on the rolls of the Company as on 31.03.2006 was 864.

Quality First Quality Next Quality Always

• Take pride in your job

• Get things right first time

Add value for customers

• Customer is first, next and final

• Reduce costs

• Deliver on time

• Be innovative look for continual improvement

• There is always a better way of doing things

Staff:

The company is accommodating various employees, they comprise of

personnel, staff, workers and trainees. Most of them are from Mysore City. The

company continues to have cordial and harmonious relations with its employees.

Regular audit on safety and environment are done by the competent professional and

the recommendations are followed to provide a safe and clear work environment. The

total number of employees on the roles of the company as on 31st July is 1139 is

distributed in different departments.

The company has successfully formalized in long term settlement. The long-

term wage settlement includes better productivity optimization of output and

continuing harmonious industrial relation.

EOHS- Policy:

We at Falcon Tyres Ltd., manufacturing Tyres, Tubes and Flaps are committed

to develop environmental riendly healthy and safe working systems. We shall achieve

this by:



• Use of proper and efficient methods in our operations with the aim of

conservation of natural resources, prevention of pollution and hazards.

• Compliance with applicable legislations and regulations.

• Training at all levels and continually improving Environmental, Occupational,

Health and Safety performance.



VISION STATEMENT:

The Company believes in the philosophy of continuous improvement in all facets of its

operation and to have leadership status in two and three wheeler segment.

MISSION STATEMENT:

Falcon’s turnover has to cross 500 crores mark in next 2 years consolidating its

market position and improvement in customer relations and product quality.



SWOT Analysis

(Strength, Weakness, Opportunities & Threats):

Strategic management is concerned with establishing proper organization

environment fit. It involves watching the organization factors with the environment

factors. Strategic management therefore, involves analysis of the organization factors

(i.e. Strengths and Weakness of the organization) and the environment factors (i.e. the

threats and opportunities in the business environment).

SWOT means, analysis and assessment of comparative strengths and weakness

of a firm in relation with their competitor and environmental opportunities and threats,

which a company may likely to face. SWOT analysis is such a systematic study and

identification of those aspects and strategies that best suit the individual company

position in a given situation. It should be based on logic and rational thinking such that

a proper strategy improves an organization business strengths and opportunities and at

the same time reduces its weakness and threats.

The SWOT ANALYSIS of FTL is given below:

STRENGTHS:

• Brand Equity of “DUNLOP”

• Necessary infrastructure and additional capacities created to cater to the

marketing requirements.

• The company has increased its presence in all the markets viz. OE,

Replacement, Exports.

• Consistent quality and after sales service with full fledged R & D Backup.

• Flexibility in production.

• Excellent manpower.



WEAKNESS:

• Depends on “OE” Customers

• Loss of flexibility in pricing of products due to severe cutthroat competition.

• Non-participation in OEM’s like TVS, Honda Motors, etc., the fast growing

companies.

OPPORTUNITIES:

• To corner the market share of the unorganized sector (18% of the total market is

unorganized).

• To develop Export Market (Especially South-East Asian countries with strong

2-wheeler and 3-wheeler presence

• To achieve volume and ease dependence on OEM’s through corporate tie ups.

THREATS:

• Increased presence of global players in the local market.

• Unacceptable rise in prices of Natural – rubber and crude – oil products (vital

ingredients in tyre manufacturing)

• Technical expertise of foreign players, especially in tubeless tyres.

• Over dependent on Natural Rubber (NR).



FINDINGS:

• Loss of flexibility in pricing of products due to severe cutthroat competition.

• It is found that most of the employees are happy and satisfied with their salaries.

• There is good co-ordination and understandings between the employees and employer.

• Increased presence of global players in the local market.

• They have given least importance for the promotional activities.



SUGGESTIONS:

• Since there is severe competition in the market, they should give

More importance to the quality of the product.

• The employees should be promoted to the higher posts depending

On their performance and efficiency but not with their experience.

• The employees should be provided with rewards for their excellent

Performance in order to motivate them.

• The company should give importance to the promotional activities in

order to improve its efficiency.



CONCLUSION

Our exhaustive research in falcon tyre industries threw up some interesting trends

which can be seen in the above analysis. A general impression that we gathered during

Data collection was the immense awareness and knowledge among people about

various companies’ products. People are beginning to look beyond falcon tyre for their

needs and are willing to trust the company with their hard earned money.

A high penetration of print, radio and Television ad campaigns over the years is

beginning to have its impact now.

The general satisfaction levels among public with regards to policy and agents still

requires improvement.



BIBLIOGRAPHY:

Website:

• www.falcon tyres.com

• www. google.com

Company Resources:

• Company’s manual

• Company’s annual report

• Records & reports

• Economic times dailies &

• Business line magazine


http://www.falcon/

35107540 krupa falcon tyre project (1)

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