Thursday, February 24, 2011

Expectation of the Industry

To uplift the tyre industry from the hardening raw material prices, ATMA has submitted a pre- budget Memorandum to the Government for its consideration in the forth coming Budget 2011-12.

Tyre Industry is one of the raw material intensive industries, where raw material cost accounts for nearly 62% of tyre turnover and 70% of the production cost. Natural Rubber is one of the key raw material for the tyres, accounting 42% of the raw material cost, followed by Carbon Black and Nylon Tyre Cord fabric and Rubber Chemicals.

Consumption of synthetic rubber is also increasing on the back of spike in the natural rubber prices. The consumption of synthetic rubber in tyre industry has increased by 34% to 1.70 lakh MT in April - October 2010 and constituted 71.9% of the total synthetic rubber consumption.

The raw material prices are still shooting north and are recording a new high. The spike in the cost from the past 12 months have alarmed to the tyre industry and has resulted in contraction of operating margins on q-o-q basis in quarter ended December 2010.

Read lot more in Rubber4U – 1st March 2011 issue

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