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Excerpts from the interview:

On Crisis in the industry:

India, as a whole, is clearly going through trying times, while GDP growth continues to slow the growth rate from a peak of 7.5% has decelerated to a little less than 5%. What is of more concern to us is the fact that the growth in industrial production had dropped drastically from a peak of around 11% per annum to a little over 4%. The lack of investment, and project fruition, especially in the infrastructure sector, is now clearly adversely affecting the Indian industry. The general slow down in exports and increased competition from imports, and the overall picture is a sea change from the high levels of optimism of three - four years ago.

So the tyre industry growth has also slowed down. Some manufacturers have even stopped production altogether. The fact that some of our major customers had reduced production this year due to inventory build-up, and labor unrest, also has not helped.

The SBM is coping with the crisis effectively. To tide over the crisis, it has expanded its business interests outside the tyre and rubber industry. It supplies a healthy range of products to the plastics, optical fiber and power cables, synthetic fibers, pharmaceuticals and security industries as well. This has effectively mitigated the risks of being dependent on just one industry - especially a cyclical one - such as tyre and rubber.

The continued political instability, Far Eastern economic crisis, and possible global recession are complex variables. We do hope, however, that by early 2000, the economy should start improving.

On the future of tyre industry:

The tyre industry in India has already embarked on a process of consolidation, and this is no different from what has basically happened in the rest of the world already. India is no more an isolated economy, and the continued economic liberalization, and relaxation of import duties and laws, makes competition from overseas inevitable. In fact, tyres are already being imported into India.

Nevertheless, while the Indian tyre industry does lack scale, the tyre companies themselves have proven to be very competitive. What is especially encouraging is the vigor with which the Indian tyre companies are proactively changing to face global competition in the changed economic and industrial environment. Product improvements and cost reduction programs, along with a focus on the future - radials - augurs well for the industry. Also, we believe the unique road conditions, and consumer behavior in India, provides a window of opportunity, for a few years atleast, before the mainstay of the Indian tyre industry-bias truck and bus tyres - will be threatened by the shift towards radials. We are confident that the continuing innovative efforts of our partners in the Indian tyre industry will produce the necessary results that allow them to continue to perform credibly in the future as well.

On SBM's pre-eminent position in the industry:

We would have to say that it is our strong dedication and commitment to our customers that helped the group to achieve this position. With that as a focal point, we have built considerable knowledge of the industries we serve. In fact, we view our knowledge of these industries, and the fact that we enjoy excellent relationships with our customers, as our most critical differentiators. To understand our own customers' requirements, we also regularly meet and interact with our customers' customers. Additionally, a comprehensive product portfolio that includes a vast range of raw materials and capital equipment, a strong infrastructure in terms of people and systems, and a continuous drive to improve, position us well to best serve our customers' needs in this fast changing world.

In line with this, our objective is to be the suppliers of choice of our customers. To achieve this, our strategy is to be the integrated and full service supplier to our customer base.

On expansion plans:

We are in the process of establishing an instrument service and technical centre to better serve our instrument customers. We continuously seek opportunities to strengthen our product portfolio, and are actively seeking to represent quality manufacturers of carbon black, and certain types of synthetic rubbers in India. In addition, we plan to add further to our technical service as well. For the medium to long term, we plan to enter production. Our strength is our in-depth market knowledge, and marketing and distribution skills. We will seek a strong technology partner to increase our commitment and to improve our services to our valued customer base.

On effective marketing and management:

We employ well-qualified staff, and not only provide the necessary tools, but also the motivation to excel. We have organized ourselves in a matrix with the focal point, for the sales team, being the customer, and the operations team, our principals. Furthermore, each industry segment has a leader on an all India basis. Our regional office supports the regional requirements of customers as well. By organizing our sales efforts around a synergistic product portfolio, we are also able to best serve our customers' growing needs.