"I Have Completed Only Half Of My Entrepreneurial Journey and I am Still Enjoying It"
Onkar S Kanwar, the tyre tycoon takes a tour down the memory lane.
Apollo Tyres' Chairman and Managing Director, Onkar Singh Kanwar’s father wanted to sell the company for Re 1 when he took over. From there on, he fought against hostile government policies, labor unrest, and steep competition to make it a billion dollar company. In an exclusive interview with Entrepreneur, Kanwar unfolds his entrepreneurial journey.
How did you start Apollo Tyres and that too in Kerala?
I came back from the US in 1964 to join my father’s pipe business. The country was a controlled regime, so anything you made sold like a god’s gift. There was no question of quality or competition.
When we thought of expanding, we easily got the license to start a tyre manufacturing business but had no access to rubber. It was the (then) Chief Minister of Kerala (one of the biggest rubber producing states) who invited us to start the business there. In Kerala, the general population is very intelligent but union minded. This was just before the Emergency period (1975-77), but luckily we could set up the factory on time.
Did anything change post-Emergency?
Many companies like Coca-Cola and IBM ran into trouble (Large conglomerates were taken over). Our factory union also wanted the company to be nationalized. But my father shared a good relationship with the (then) Prime Minister Indira Gandhi and roped in (Fali) Nariman to fight the case. Though we managed to restore the company but ran into huge losses. My father was tired and once said, “I want to sell it for Re 1. If you want you can take it over.” No one in the family wanted to be in the tyre business.
Then what made you continue with the business?
I often wondered how companies like Hindustan Lever and Nestle could last for so many years. My dream was to build an institution like those.
You might ask me, why did you choose tyre and that too in Kerala? Because I simply realized that the industry would grow. The challenge was we were making a lousy product. We had an American collaborator but they never went into the nitty-gritties. The customers complained all the time. We had intelligent people in the team but a faulty technology. The factory was on the verge of closing down. So, I called the senior management and told them, “See, we are practically sitting on a gold mine. Let’s work as a team and see what we can do.” That’s how it started.
How difficult was it to turn things around?
Initially, we were making all kinds of tyres. Here I should mention, at that time I knew nothing about tyre manufacturing. I trusted my team and asked them, “Tell me, where is the money?” My accountant told me – truck tyres. So, I decided to focus on that. Modi Tyres were making the best tyres during this period. We picked up a few of their tyres and looked at them - how they were made. In this, the entire staff worked as a single team. In the first year, we suffered losses. Then we made Rs 6 crores but in the same year, Modi earned Rs 50 crore. I started doubting myself but slowly the business started taking pace. In the meanwhile, we had to face labor agitation and since, we had acquired Premier Tyre, a sick tyre manufacturing company, we had to take care of that also. Moreover, there were restrictions on the number of tyres that could be produced. However, the forward-looking economic policies introduced in 1991 by (then) Prime Minister Narsimha Rao and Finance Minister Manmohan Singh changed many things for Indian businesses. We never looked back. I believe Narsimha Rao was one of the most underrated Prime Ministers India ever had.
How do you measure success?
Here I would like to mention a personal experience. Once I was traveling from China, a young man came up to me and asked “Are you Mr Kanwar? I said yes. He introduced himself as the third-generation entrepreneur of a tyre-making company. He said “You know Apollo is known as the Coca-Cola of truck tyres.” The feedback made me very happy. I realized that I must have done something right to earn such a reward.
How do you differentiate yourself from competitors?
People hardly notices which tyres are fitted to their cars. We realized brand building was important.
First, you need to make an effort to skill your employees on a regular basis and invest in R&D and technology. Earlier, when India was a closed economy, we never made such efforts. We would make a product and people would buy it. But, after we looked outwards, we became more aware. Second, as a dealer, we use the fast moving consumer goods model. We make sure that the customer comes to the dealer. We have fitters to ensure that the tyres are fitted properly. These are basics and in many cases, when you become big you forget the basics. We haven’t lost that.
What are the few principles you follow as a businessman?
Some classic American case studies teach you a lot about business. Like General Motors – initially, it saw a massive growth then got into a huge mess. Then IBM shifted to software from hardware. Now they are reinventing themselves as to what they should have done differently.
The biggest challenge for me was how do I reach where I aimed to be? Once I started doing well, I kept thinking, how do I raise money? I keep an eye on three numbers very closely: first, the top line, second, the bottom line and third, the cash. There is no point in saying that you are selling products worth Rs 1,000 crore, if you have Rs 200 crore debt in the market.