Indian tyre makers face profits crunch - ICRA

ERJ staff report (DS)

Mumbai, India - Despite a strong recovery after the Western recession and healthy demand, the Indian tyre industry may face a squeeze on profits as raw materials prices rise, according to research from ICRA Limited (formerly Investment Information and Credit Rating Agency of India Limited).

Over the next 12-15 months also, ICRA expects the profitability of tyre manufacturers to be affected by the expected supply gap for rubber, despite the robust demand for tyres.

The Indian tyre industry is highly raw material (RM) intensive, with RM accounting for about 65-70 percent of the

production cost for tyres. The key raw materials used in the manufacturing process are natural rubber (NR,

about 43 percent of the total raw material); synthetic rubber (SR, about 15 percent); nylon tyre cord fabric (NTCF, 18 percent);

carbon black (about 11 percent) and rubber chemicals (about 5 percent)1.

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Press release from ICRA

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Tyre makers' profitability may skid in 12-15 months: ICRA Business Standard (India)

Tyre makers' profitability may skid: ICRA Indian Express (India)

Tyre makers' profitability may skid: ICRA Financial Express (India)