Modi Tyres, a part of the Modi Group, which resorted to a financial restructuring exercise last year, has recommenced production of truck and bus tyres in July at their Modipuram plant in Uttar Pradesh, after re-forging a technical collaboration with Continental Tyres.
The Meerut-based company has managed to resume less than two-third of its overall output of 95,000 per annum and is eyeing to post sales worth Rs. 500-600 crore this fiscal from truck and bus segment alone.
The tyres manufactured under the agreement would be marketed under the Continental brand. Prior to the closure, the company’s tyres were being co-branded as Modi Continental. It is to be mentioned that the new JV christened Modi Tyre Company (MTC), like the previous one, is only technical in nature and does not involve any investment from the German tyre company. Modi Tyres is aiming to roll out 1.1 million truck tyres and tubes annually and expects to generate Rs 1,200 crore once it starts operating at full capacity. It is also eyeing to to take its network of dealers from 500 to 2,000, and carrying and forwarding agents from 90 to 150 to reach 800 cities.
Modi Tyre Company, a subsidiary of V K Modi-controlled Modi Rubber, had earlier announced that it had revived its technical and branding joint venture (JV) agreement with Germany-based Continental Tyres. The company has invested about Rs. 300 crore for starting its business again, which includes resuming production at its modernised Modinagar plant near Meerut. It has also started making tube making plant at Partapur. The company is also planning to produce radial tyres from its Modinagar plant, which could entail an investment to the tune of Rs. 200 crore.
According to well-informed sources, the erstwhile tie-up with Continental had lapsed after the closure of the plant in 2001. Labour unrest and litigations had led to the closure of the unit then. Modi Rubber had closed all three plants in Uttar Pradesh in 2001, following a strike by workers after the management proposed to link wages with productivity and was declared sick in 2006. Since the world’s fourth-largest tyre producing company has a similar collaboration with JK Tyre Industries and Metro Tyres, Modi Rubber, it was mandatory for the Modi Group to secure a no-objection certificate (NoC) from such companies under the provisions of Press Note 1, which they have received, as revealed by sources.
Very recently, Modi tyres had implemented Impel CRM to increase the productivity of their sales team. The Modi Tyres sales team is using Impel CRM to track dealer interactions, activities and meetings. With the Impel CRM implementation, Modi Tyres management can track dealer-level sales of not only their own brands, but also competitor sales information. Going forward, sales managers will use Impel’s Monthly Sales Activity planning functions to ensure that sales people are working pro-actively with dealers, fleet owners and C&F agents.
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