Annual Report 2010-2011 - Colombo Stock Exchange

Sector Review - Tyre
The conventional capacity in the Agricultural segment, which
is the fastest growing segment, was enhanced in order to meet
the increased seasonal demands.
The sale of “Arpiradial”, which was introduced few years ago,
has performed well. The process facilitates the retreading of
radial tyre casings, giving strength and retread ability to the
casings and uses specially designed radial tread designs. The
Company intends in introducing a larger product range in the
radial tyres since the customer base is moving to radial tyres
from the bias tyres, increasing the demand for more radial tyres
in the future.
The Company has consolidated its position in the trading
business and has successfully completed the year under review
with a substantial turnover growth. At present the Company is
the sole agent for Birla tyres India, and also represents Corsa
tyres in Indonesia. Birla Tyres are the manufacturers of truck,
light truck and agricultural vehicles. Corsa tyres specialize
in supplying tyres for passenger cars and vans. In addition
to this, sales of tubes, flaps and three-wheeler tyres have
also increased. The wide dealer network has proved to be a
significant competitive advantage which has enabled the timely
delivery of imported tyres island wide within a day.
The Company introduced radial truck tyres with the Birla
Company, further the Company also intends in increasing the
product portfolio by introducing automotive batteries to the
market.
The Company’s profitability was affected by the high price of
raw material during the year. Efficient management of costs
however enabled the company to maintain profitability.
The capacity is fully utilized by providing services to outside
customers with higher energy and labour efficiencies. The
production efficiency will be increased further in the coming
year to enhance the quality of the products.
Arpidag International entered the international market by
exporting tread in small quantities to Europe and also the
Company plans to further increase exports in the coming year.
Richard Pieris Rubber Compounds Ltd.
Richard Pieris Rubber Compounds provides mixing services to
Richard Pieris Tyre Company, several other companies within
the Group, and various external customers. The company has
state-of-the-art machinery in its factory which provides a high
level of quality. The company now also sells chemicals to local
manufacturers.
The Company is continuing its efforts to find potential
customers for milling services and help the other two
companies in the sector to achieve a higher market share by
providing an excellent mixing service.
The right product portfolio and dynamic service levels has
been the key to the sector’s success. The location of plants and
island wide distribution network enables quick delivery. A “One
day service” was introduced in designated areas with tyres in
these areas are being delivered within a day enabling dealers
to control their working capital requirements.
The sharp increase in the raw material prices proved to be a
considerable challenge during the year under review. Rubber
prices have doubled during the last twelve months and there
is no indication that these prices will come down in the near
future. Steps have been taken to increase efficiency and
maintain production at the optimum level for each plant. The
Company continuously invests in the work force and believes
that efficient human resources is vital to its growth.
Arpidag International (Pvt.) Ltd
Arpidag International is a pioneer in supplying the pre- cured
treads to the tyre industry. It supplies pre-cured tread mainly
to the Richard Pieris Tyre Company while it also supplies to
external customers through the ATM brand. The Company has
been awarded with the process quality certification of “ISO :
9001”
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Annual Report 2010/2011 | Richard Pieris and Company PLC