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Tyre maker MRF eyes acquisitions, may set up plant abroad

01 April, 2014

India’s second-largest tyre maker by revenues MRF Ltd is eyeing several acquisitions opportunities but remains cautious over committing itself to inorganic expansion, chairman and managing director KM Mammen told The Times of India.

Taking a dig at the aborted deal of its biggest Indian rival Apollo Tyres, where its ambitious acquisition of US-headquartered Cooper Tire came unstuck, Mammen told the newspaper, “You can acquire like how my dear friends did and then get slapped.”

“There is a way of acquiring. You should acquire what you can swallow. A bad acquisition can kill you,” he said.

He added that the firm is studying multiple targets but unless it can swallow what will acquire, MRF will not go ahead.

Mammen said there are also opportunities for partnerships as also part ownerships.

The firm is also looking to set up a factory outside India. “Today, manufacturing outside India is much more advantageous,” he said.

According to Mammen, MRF continues to invest Rs 800-1,000 crore a year as capex and will invest a similar amount this year.

MRF saw its net sales inch up 2.3 per cent to Rs 12,248 crore for the year ended September 30, 2013 but net profit rose 39.5 per cent to Rs 808 crore over the year-ago period.

Apollo Tyres clocks larger consolidated revenues, partly due to its overseas operations, but has lower profits. MRF also commands a higher market cap compared with Apollo Tyres, given its strong market position within India.

(Edited by Joby Puthuparampil Johnson)


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Tyre maker MRF eyes acquisitions, may set up plant abroad

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