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JK Tyre
Tyre prices to hike by 5-7%:
In an interview with CNBC-TV18, AK Kinra, Chief Financial Officer of JK Tyre, spoke about the increase in rubber prices and how it impacts the company. Here is a verbatim transcript of an exclusive interview with AK Kinra on CNBC-TV18.
Q: Is a tyre company like yours considering a second round of price increases?
A: This is a very natural phenomena that when the cost goes up the prices of the end products have to go up. Whenever the cost goes up, we first look at internally. So whatever can be absorbed internally we do it but when it cannot be done the prices have to go up. The way the rubber prices have gone up in a couple of week’s time, it’s been hovering around Rs 135 per kg. The price increase of the tyres is almost inevitable.
Q: What would be a commensurate increase in tyres?
A: The price of various categories of tyres will have to go up between 5-7% because the rubber price about six months back was hovering in the range of about Rs 72 to 90 per kg and now its around Rs 130-140per kg. It’s almost doubling the price of natural rubber. I think this warrants a price increase of within 5-7% of the end product prices.
Q: There have been reports that you are planning some sort of another acquisition probably in the South East Asian region. Can you confirm or deny this for us? Do you have any acquisition plans?
A: We acquired a company called Tornel in Mexico last year. We completed the transaction in June 2008. Fortunately the transaction has gone very well the turnaround came in the least possible time. In the current year the company is making profit. We are always on the look out for acquisitions but nothing has been firmed up as yet. We should be looking at something very seriously in the month’s ahead but nothing is firmed up as yet. As soon as we are able to zero in on a target we will be able to share it with the market. We are always on the look out.
Q: Is a tyre company like yours considering a second round of price increases?
A: This is a very natural phenomena that when the cost goes up the prices of the end products have to go up. Whenever the cost goes up, we first look at internally. So whatever can be absorbed internally we do it but when it cannot be done the prices have to go up. The way the rubber prices have gone up in a couple of week’s time, it’s been hovering around Rs 135 per kg. The price increase of the tyres is almost inevitable.
Q: What would be a commensurate increase in tyres?
A: The price of various categories of tyres will have to go up between 5-7% because the rubber price about six months back was hovering in the range of about Rs 72 to 90 per kg and now its around Rs 130-140per kg. It’s almost doubling the price of natural rubber. I think this warrants a price increase of within 5-7% of the end product prices.
Q: There have been reports that you are planning some sort of another acquisition probably in the South East Asian region. Can you confirm or deny this for us? Do you have any acquisition plans?
A: We acquired a company called Tornel in Mexico last year. We completed the transaction in June 2008. Fortunately the transaction has gone very well the turnaround came in the least possible time. In the current year the company is making profit. We are always on the look out for acquisitions but nothing has been firmed up as yet. We should be looking at something very seriously in the month’s ahead but nothing is firmed up as yet. As soon as we are able to zero in on a target we will be able to share it with the market. We are always on the look out.
