KRUPA Falcon Tyre Project

Falcon Tyres Limited
Padmashree institute of management and sciences Page 1

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 tyre
1936 – 1960 Multi National manufacturing eras
1961 – 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 MAXIMUM
TYRES 20,000 per day 30,000 per day
TUBES 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 2004-2005
1. 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 8.73
2. 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. Badrinarayanan

REGISTERED OFFICE Gold Towers,
50, Residency Road,
Bangalore - 560025
FACTORY Metagalli, K.R.S. Road
Mysore - 570 016
BANKERS 1. Syndicate Bank
2. Punjab National Bank
3. State Bank of India

AUDITORS M/s. Lodha & Co.,
14, Government Place (East)
Calcutta – 700 001
Ownership Pattern:
Shareholding pattern as on 31st March, 2006
No. of Equity Percentage of

Shares Held Shareholding
A. Promoter’s Holding
1. Promoters
Indian Promoters 331614 5.84
Foreign Promoters 3918850 68.98

2. Persons acting inconcert - -

Sub – Total 4250464 74.82
B. 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 655512 11.54
b. Indian Public 767074 13.50
c. NRI’s / OCB’s 7872 0.14
d. Any other - -
Sub – Total 1430458 25.18
Grand Total 5680922 100.00
TOP DOWN, AUTHORITARIAN IN FALCONTYRES LTD

BOD
Managing Director
&
Vice Presidents
General Managers
&
Managers
Officers
Workmen / Laborers
Permanent (Experienced / Skilled)
Trainees, Apprentices, Casuals (Skilled / Unskilled)
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

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
Board of Directors
Directors
Managing Marketing
Director
VP Operation VP Operation
VP Operation
Production
Finance
Expansion
Technical
Accounts Engineering
Diversification
Engineering &
Costing Planning
Modification
Commercial Quality Assurance
Accounts
Stores
Systems
Institutional
Marketing
Secretarial Dept
Human Resources
Purchase

OFFICER AND DIRECTORS
Name Current Position

Vice President - Finance, Compliance Officer,
Badrinarayanan, S.
Company Secretary
Gandhi, Tarun Non-Executive Director
Jain, Ambuj Non-Executive Director
Bhansali, Sunil Executive Director
Ruia, Pawan Executive Chairman of the Board
Prithviraj, Kokkarne Additional Director
Ravi, S. Additional Director

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
MASTER COMPOUND
FINAL COMPOUND
Thread insullationca
65’’ Calendar Bead
extension lendar
winding
bias cutter
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 Discount
Within 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

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Falcon Tyres Limited

Padmashree institute of management and sciences Page 1

MAJOR KINDS OF RAW MATERIALS USED IN TYRE INDUSTRY:

Padmashree institute of management and sciences Page 2

2. SYNTHETIC BUTADIENCE RUBBER:

b. Poly Butadiene Rubber:

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

4. NYLON YARN / FABRIC / TYRE CORD

Nylon tyre cords are an essential reinforcement material weightage of Nylon

Padmashree institute of management and sciences Page 3

Padmashree institute of management and sciences Page 4

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

Padmashree institute of management and sciences Page 5

Padmashree institute of management and sciences Page 6

Padmashree institute of management and sciences Page 7

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

Padmashree institute of management and sciences Page 9

GROWTH AND DEVELOPMENT OF THE INDUSTRY

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

(d) Impact of proposed measures

Padmashree institute of management and sciences Page 10

2) Savings in Brought out Water Cost

Padmashree institute of management and sciences Page 11

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

Falcon is the preferred choice of all leading vehicle manufacturers.

Padmashree institute of management and sciences Page 12

A) Company’s Philosophy on Corporate Governance:

Padmashree institute of management and sciences Page 13

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

The Managing Director of FTL is Mr. A. Sadasivam

Padmashree institute of management and sciences Page 14

The functions of the committee are given below:

a) Review the Company’s financial reporting process.

Padmashree institute of management and sciences Page 15

D. Investors / Shareholders Grievances Committee

Padmashree institute of management and sciences Page 16

Apollo Tyres Ltd. (ATL)

Future Growth and Prospectus:

Padmashree institute of management and sciences Page 18

Transit Period = Minimum Level Maintained * Demand

MILESTONES OF FALCON TYRE LIMITED:

1973 : FTL was promoted by a group of professionals.

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

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POWER & FUEL CONSUMPTION

Major Customers of Falcon Tyres

COMPANY SECRETARY Mr. S. Badrinarayanan

3. State Bank of India

No. of Equity Percentage of

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2. Persons acting inconcert - -

TOP DOWN, AUTHORITARIAN IN FALCONTYRES LTD

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TOP DOWN, AUTHORITARIAN

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Organization structure refers to the basic hierarchical procedure In which

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