Between its two plants in India and one in Israel, ATG currently produces 150,000 tonnes tyres per annum and plans to ramp it up to 200,000 by 2020, taking it further to 300,000 tonnes by 2025, said Nitin Mantri, chief executive officer, ATG. ATG will invest around $300 million to $400 million for the expansion.
ATG closed 2017 with a turnover of $575 million and sees itself clocking high double-digit growth over the next few years. It plans to reach the billion-dollar mark as demand for off-highways tyres across the US, Europe and emerging markets gather momentum.
“We have been growing very fast at 10 to 15 per cent year-on-year, but not because of the market, as its only expanding at 3 to 4 per cent,” said Mantri, attributing the growth to a combination of factors including his company’s ability to produce high value tyre and being able to address even those original equipment manufacturers (OEMs) that have a requirement as low as 100 tyres a month. ATG produces 3,000 varieties of tyres.
Nearly 95 per cent of what the company produces in India is exported. But that may change as Mantri and his team are planning to step up the share from a region which accounts for only 4 per cent in value terms. The market for OTRs globally is valued approximately at $15-16 billion, said Mantri.
In India, one of its smallest markets, ATG counts MRF Tyre as one of its key competitors.
Over the last decade, ATG, which was a loss-making Israel-based company, till it was bought by Mahansarias with the backing of Warburg Pincus in 2007 for $150 million, has changed quite a few times. In 2013, KKR acquired a controlling stake in the company from Warburg for an undisclosed sum. KKR exited the company by selling its controlling stake to Yokohama in March 2016.
“The good news
is Yokohama is not going to sell us off,” said Mantri.
It is not often that a small company when acquired by a big one, is allowed to retain its DNA and not forced to imbibe the culture of the new parent, but ATG’s acquisition by Yokohama is an exception, he added.