Pakistan government’s measures to curb illicit import of tyres, coupled with growing demand, have helped the tyre industry to rebound after enduring a dent from the Covid-19 pandemic.
The General Tyre and Rubber Company of Pakistan has achieved a turnaround in earnings as it strives to recoup the losses incurred on account of Covid-19, said company CEO Hussain Kuli Khan. “The company is steadily on the road to recovery,” he said. “Following the Covid-19 global shutdown, the plant had ceased production for nearly 75 days before resuming operations in June.”
General Tyre caters to four segments of consumers namely original equipment manufacturers (OEMs), replacement market, institutions and export market.
Last year, sales in the replacement market kept the company afloat as the segment strengthened owing to steps taken by the government to curb smuggling and the Covid-19 pandemic which impacted the supply of under-invoiced imported tyres, the CEO revealed.
Similarly, sales to OEM started picking up after a lacklustre year while institutional or army tender sales increased as well as preference was given to domestic products, which were of good quality and price competitive, he elaborated.
“Exports of the company have also grown significantly in the past couple of years and we hope to continue the trend this year as well,” he said. “Our major destination is Afghanistan.” At the end of first quarter of current fiscal year, net sales of the company were recorded at Rs3.2 billion, up 42% against the same period of last year.
The company contributed Rs13.5 billion to the national exchequer over the past five years in the form of duties and taxes, said the CEO.
Over that period, the company also invested Rs4.7 billion in balancing, modernisation and replacement (BMR). The company has invested in an automatic tyre sorting and conveying system to deliver tyres from factory to warehouses via inspection.
The CEO welcomed Chinese tyre companies which were interested in inking joint ventures with Pakistani counterparts for setting up manufacturing plants in Pakistan.
Speaking to The Express Tribune, Arif Habib Limited analyst Arsalan Hanif said company sales achieved a turnaround owing to a drop in the illegal import of tyres.
He pointed out that the company was involved in negotiations on enhancing duties on imported tyres in a bid to gain a level playing field.
“Other players are also joining in such as Loads Limited, which is set to kick-start its new tyre plant next year,” he revealed.
