A Comprehensive Project report on Rubber Industry

INDEX
Chapter No. Point Topic Page No.
Students Declaration I
Institute’s certificate II
Preface III
Acknowledgment IV
Executive summary V
1 INTRODUCTION ABOUT RUBBER INDUSTRY 1
2 RESEARCH METHODOLOGY
2.1 Research methodology 6
2.2 Title of the research 6
2.3 Research objectives 6
2.4 Research design 6
2.5 Data sources 6
2.6 Data analysis 7
2.7 Limitation of study 7
3 WORLD SCENARIO FOR RUBBER INDUSTRY 8
4 INDIAN SCENARIO FOR RUBBER INDUSTRY
4.1 Indian scenario 11
4.2 Overview of rubber industry 11
5 PRODUCT PROFILE 12
6 FACTORS AFFECTING DEMAND FOR RUBBER INDUSTRY
6.1 Demand determination of the Rubber Industry 20
6.2 Lower Cost 20
6.2 Global shortage 20
7 PLAYERS IN INDUSTRY 22
8 DISTRIBUTION CHANNEL IN INDUSTRY
8.1 Raw material Costs 27
8.2 Distribution scenario 30
9 KEY SUCCESS & CURRENT TREND
9.1 Technology up gradation 32
9.2 Radial rubber 32
9.3 Introduction of new concept 32
9.4 Growth of automobile industry 32
9.5 Government policy 32

10 PESTEL ANALYSIS 33
11 PORTERS FIVE FORCE MODEL 37
12 BCG MATRIX 48
13 OT ANALYSIS 51
13.1 Opportunities 52
13.2 Threats 53
14 FUTURE OUT LOOK
14.1 Crisis in the industry 56
15 CONCLUSION 58
16 BIBLIOGRAPHY 60
17 ANNEXURE

S.V. Institute of Management, Kadi. 1
Chapter: - 1
Introduction
About Rubber
Industry

1.1) What is rubber?
"Rubber" they don't usually specify what kind. There are many different kinds of rubber, but
they all fall into two broad types: natural rubber (latex—grown from plants) and synthetic
rubber (made artificially in a chemical plant or laboratory).
Natural Rubber
Natural rubber, also called India rubber or caoutchouc, is an elastomeric (an elastic
hydrocarbon polymer) that was originally derived from latex, a milky colloid produced by
some plants. The plants are ‘tapped’ by making an incision in the bark of the tree and collecting
the sticky, milk-colored latex sap, which is refined into usable rubber. The purified form of
natural rubber is the chemical polyisoprene, which can also be produced synthetically. Natural
rubber is used in many applications and products, as is synthetic rubber. It is normally very
stretchy and flexible and extremely waterproof.
Natural rubber is often vulcanized, a process by which the rubber is heated and sulfur, peroxide
or bisphenol are added to improve resistance and elasticity, and to prevent it from perishing.
Carbon black is often used as an additive to rubber to improve its strength, especially in vehicle
tires.
Types of Natural Rubber
1, Natural Gum Rubber - Superior resilience, tensile strength, elasticity, and abrasion
resistance.
2, Natural Latex Rubber - Ultra-elastic has excellent strength and stretch ability. Has
exceptional tear resistance.
Synthetic Rubber
Polymerization of denies (molecules containing double bond) to form substitutes for rubber is
the forerunner of the enormous present day plastic industry. Chloroprene was the first
commercially successful rubber substitute produced in the United States.
The properties of Rubber so formed are determined by the nature of the substituent groups. For
example, Polychloroprene is inferior to natural rubber in some properties but superior in its
resistance to oil, Organic Solvents. These differences are due to difference in nature of their
monomers: Isoprene (for natural rubber) and Chloroprene (for synthetic rubber).
Synthetic Rubber (also known as Gutta-Percha) was obtained by the free radical
polymerization of Isoprene. The rubber so formed has all trans- Configuration. As a result of
this, synthetic rubber has a highly regular zigzag chain which cannot be stretched .This
accounts for non-elasticity of Synthetic Rubber.

Types of Synthetic Rubber
1. Neoprene
Neoprene is a polymer of chloroprene. It is also known as Polychloroprene. To synthesize
Neoprene its monomer Chloroprene is required. Chloroprene required for this process is
synthesized from Vinyl acetylene which performs Markonikov addition under acidic condition
to produce Chloroprene.
Uses of Neoprene
It is used in the manufacture of hoses, gaskets, shoe heels, stoppers, conveyor belts and printing
rollers etc. It is also used as an insulator.
2. BUNA–S
BUNA–S is a copolymer of a mixture of 1,3- Butadiene and sRubberne in the ratio of 3:1 in
the presence of sodium (which is polymerizing agent) gives sRubberne – butadiene copolymer
(sRubberne – butadiene rubber) or BUNA –S. The name BUNA–S is made up of Bu which
indicates 1, 3 – Butadiene, NA is for Sodium (Na) and S indicates SRubberne.
Properties of Buna–S
 It is very tough and a good substitute for natural rubber.
 It possesses high abrasion resistance.
 It has high load bearing capacity.
Uses of Buna–S
 It is used for manufacturing automobile Rubbers.
 It is used for making floor tiles, footwear components, cable insulation etc.
3. BUNA – N (Nitrile Rubber)
BUNA–N is obtained by copolymerization of 1, 3 – Butadiene and acrylonitrile in presence of
a peroxide catalyst. The name BUNA–N is made up of Bu which indicates 1, 3 – Butadiene,
NA is for Sodium (Na) and N indicates acrylonitrile.
Properties of BUNA–N
BUNA-N is resistant to the action of petrol, lubricating oils and organic solvents.
Uses of BUNA–N
BUNA-N It is used in making oil seals, hoses, tank linings etc.

4. Thiokol
Thiokol is prepared by copolymerization of 1, 2 – dichloromethane (ethylene dichloride) with
Sodium Tetrasulphide (Na2S4) in presence of Magnesium hydroxide.
Properties of Thiokol
Thiokol is resistant to the action of mineral oils, solvents, oxygen & ozone.
Note: Thiokol is also known as polysulphide rubber. It’s tensile strength is slightly less than
that of Natural rubber. It’s different from vulcanized Rubber.
(Refferance-<ref='http://www.chemistrylearning.com/rubber/'>Rubber</a>)

Chapter: - 2
Research
Methodology

2.1) Research Methodology
Research is pursuit of truth with the help of study, observation comparison and experiment. In
short, The search for knowledge through objective and systematic method of finding solution
to problem is research.
A research Methodology refers to the methods the researchers use in performing research
operations. By research methodology not only the research methods are consider but also the
logic behind the methods use in context of the research study and explanations are given on a
particular technique is used.
2.2) Title of the Research
A study on rubber Industry in India
2.3) Research Objective
 To Analyze current scenario of Rubber industry in India
 To Interpret role of Rubber sector in economic growth
 To find out the challenges ahead of the rubber sector
 To study Industry’s Driving force
 To find out opportunity and threats in Indian Rubber Industry
2.4) Research Design
Research design is plan of action, a plan for collecting and analyzing data in an economic,
efficient and relevant manner.
Exploratory research provides the information to conduct the descriptive research, review of
literature explores the necessity for the further research. So to study the rubber industry in
India, Descriptive Research Design has been applied
Descriptive research is mainly done when researcher wants to gain a better understanding of a
topic.
2.5) Data Sources
Secondary data collection is done with help of published magazines, paper, reports, various
websites and other reliable tools, such information are already investigated and compiled by
certain people or agencies or by government organization.

This secondary data is collected from the secondary sources are given below:
 Catalogues
 Websites
 Magazines
 Books
 Newspapers
 Article
 Government institutions
2.6) Data Analysis
All the information is in this report information is in this report is based on the secondary data
sources, so there is no need to do the primary research.
2.7) Data Analysis
 PESTEL analysis
 SWOT analysis
 GE Nine Matrix
 BCG Matrix
 Port’s five force model analysis
 Strategic group mapping model
 Key success factor
2.8) Limitation of Study
Although care has been taken to make this report as correct as possible, there are factors that
might to an extent introduce some probability of inaccuracies, which are discussed below:
 The first limitation of our project is the project is the time constraint, as we have to complete
this project in limited time period.
 The project is wholly based the secondary data, which is less reliable than primary data.

Chapter: - 3
World Scenario
for rubber
Industry

3.1) Global Scenario
 Thailand, Indonesia, India, China, Malaysia, Vietnam are the major producers of rubber in the
World.
 The global production fluctuates between 6-8 million tons, with a production of 7.9 million tons
in 2003, of which Asian countries have produced 6.76 million tons.
 On the consumption front, global NR consumption is 7.89 million tons in 2010, of which 1.9
million ton was consumed in India and China alone. The total synthetic rubber consumption in
2010 was 1.13 million ton.
 Around 60 % of the global rubber production is used by the transportation sector. In this sector,
natural or synthetic rubber cannot be used individually and has to be blended.
Top 5 Rubber Producing Countries
23%
31%
26%
8%
12%
Percent Change
1 Thailand 2 Indonesia 3 Malaysia 4 India 5 Viet Nam
Country Percent Change
1 Thailand 9.73%
2 Indonesia 12.92%
3 Malaysia 10.86%
4 India 3.40%
5 Viet Nam 5.04%

Chapter: - 4
Indian Scenario
For Rubber
Industry

4.1) Indian Scenario
 India's rubber production in India is around 6-7 lakh tons.
 Kerala accounts for 90% of India's rubber production. The other producer is Karnataka.
 RSS (Ribbed Smoked Sheets) account for 72% of the production and 45% of the imports. Block
Rubber accounts for 10% of the production and 40% of the imports.
 The Rubber industry, consumes 52 % of the almost 7 lakh rubber produced in the country.
 Rubber is the major form in which rubber is exported from India. India's Rubber exports are
around Rs. 1200-1300 crores a year. Duty free imports against the advance license scheme is
permitted for re-export and rules mandate that only 44 kg of natural rubber can be imported
against 100 kg of exports. India's imports vary between years and are currently around 50000-
60000 tons a year. Duty-paid imports of natural rubber under open general license attract 20 %
import duty.
4.2) Overview of Indian Rubber Industry
The Indian rubber industry is one of the key sectors of the economy and a sector that has been
in existence from the early days. Though in the initial days, the sector was more attuned to
catering to the inward needs to the country, the sector has now evolved to become a
manufacturing major. Some of the key factors that highlight the criticality of this sector in the
Indian economy are:
 The area under rubber plantations in India is ranked sixth globally
 India ranks fourth in the world natural rubber production
 India is ranked second in the consumption of natural rubber, behind China
 India is the top ranked nation globally in terms of productivity

Chapter: - 5
Product profile

5.1) Product Profile of rubber Industry
1 Rubber Gasket:
Victaulic Coupling Gasket
Rubber Industry has a variety of rubber gasket seal to provide the option of grooved piping
products for the widest range of applications. To assure the maximum life for the service
intended, proper gasket selection and specification in ordering is essential.
Material: EPDM recommended for water service within the specified temperature range up to
80°C, Silicon recommended for dry heat, air without hydro carbons up to 170°C and certain
chemical services, NBR recommended for petroleum products , hydro carbons, air with oil
vapors, vegetable and mineral oils within specified temperature up to 120°C.
Dresser Coupling Gasket
This gasket well known as Mechanical Joint Gasket Our wide through knowledge in this
domain yielded us a dominant position in this industry for manufacturing and supplying dresser
coupling gasket. These gaskets are made up of superlative quality rubber which is procured
from authentic vendors of the market. Our offered gasket is available for the customers in
different dimensions and specifications, with an aim to meet their variegated requirements. The
provided parts are used in Dresser Coupling to join two spigot ends of a pipe. This type of
gasket is efficient in places where it is extremely difficult to insert a regular pipe.
Butterfly Valve Gasket
This is manufactured using different types of rubber like neoprene, EPDM, Silicon as well as
natural rubber. We have latest production machinery and technology to meet the demands of
our customers. The Butterfly Valve Gaskets is demanded but our customers for optimum
quality, high functional life, durability and economical prices. We welcome products inquiries
from our customers to provide them the best deals in the market.
Flange Gasket and all others customized designed gasket.
Pipe flange gasket is used for improved joint performance. They are considered much more
superior to the conventional ring or full-face gaskets. Although pipe flange gaskets are usually
used for all normal water and sewer service, they are especially useful in demanding services
like in very large diameter flanged piping. For specially designed long-span installations,
involving 2 or 3 more lengths of pipe or with any underground flanges, flange gaskets are of
great help because they could be subjected to undesirable beam loading.
These gaskets are available in numerous standard materials in various thickness and hardness
options for various flange sizes. Most materials are available starting at 1/16” thick for class
150 class 300 class 400 class 600 class 900 class 1500 and class 2500. If you have a custom

size pipe flange gasket, Indian Rubber Industry can manufacture replacement gaskets from a
sample or metal dimension.
2Rubber & PU seals
Piston Seal
Piston Seals are used to seal pressurized fluid or air between the piston and the bore in a
hydraulic or pneumatic cylinder. Piston Seals are used in both reciprocating and linear
applications. This are available both Single acting and Double acting systems.
Single Acting Seal: These seals are capable of sealing dynamic pressure from one side only,
with gravity or a spring returning the cylinder. Single acting piston seals are U-Seals, Energized
U-Seals, and U-Cup Seals. The most common material for single acting piston seals is PU
(Polyurethane) but other available materials include NBR, FKM and Neoprene.
Double Acting Seal: Double-acting piston seals are capable of sealing dynamic pressure from
both sides. They are symmetrical and their sealing functions are identical in both directions.
We offer a range of differing qualities and designs of double-acting piston seals. Double-acting
Piston Seals could use a thermoplastic elastomeric or filled PTFE cap, energized by a NBR O-
Ring, in a composite or co-axial arrangement. Foot the higher pressures, a T’ shaped NBR
energizer is often used in combination with a sealing cap. Hard, engineering plastic, anti-
extrusion are then fitted. IRI also stocks double-acting piston seals with wear rings. These
generally have NBR or NBR/fabric-sealing elements, thermoplastic elastomeric support rings
and Actual (POM) bearings. These can include one-piece and two piece piston seals.
Rod Seal
The Rod Seals often decides the overall performance of an entire hydraulic or pneumatic
cylinder. The Rod Seal has to meet the most demanding requirements and in additional to
normal wear and aging, a Rod Seal is directly affected by changes on the road surface such as
temperature extremes.
Leakage through the Rod Seal is one of the most common failures and therefore it is vitally
important to choose correct Rod Seal type and design to suit a particulars application.
Indian rubber Industry supplies a variety of Rod Seal for both Hydraulic and Pneumatic
cylinders, as well as Buffer Seal, Bask-ups, and Custom rod seal.
Wiper Seal
Wiper Seal are designed to keep the rod and cylinder clean and free from foreign matter, such
as dust, dirt and moisture. Wiper is used in both linear and Dynamic Sealing application. Our
Wipers come in a wide variety of Metal-case snap-in styles and as well we offer the option of
Wipers that are custom made to suit their specific needs. A Wiper is not a pressure sealing
element. Instead, it avoids the abrasive effects which result if contaminants reach the sealing

and rod bearing elements of a fluid power system. Contaminants can cause significant damage
to the rod, cylinder wall, seals, valves and other components and may lead to premature seal
and components failure.
U-Seal
Primarily used for sealing leakage of oil within the engine. The fabricated PU & Rubber U-
Seals find comprehensive application within automobile industry. Considering the distinctive
client’s requisites, our gamut is imparted in various sizes and specifications. It has high
abrasion resistance and low compression set. These products are highly appreciated among our
clients due to their long life and excellent finishing. In addition to this, these are widely used
in Hydraulic cylinders and pneumatic cylinders and are very reliable
Composite Seal
Compact Seal that we offer is manufactured using excellent quality material that have stable
and low contact resistance, good mechanical strength and high hardness so that it is widely
applicable in various electrical appliances. We offer these compact seals as the specification of
our clients by following international and ISO standard of quality. We use latest technology
machines and equipments for quality inspection as to provide excellent quality Compact Seals
to our esteemed clients.
Chevron Packing Seal & V-Seal
These are manufactured canvas impregnated with NBR which is used in form of set consisting
of top and bottom rings. The numbers of V-rings in a set are variable and depend upon the
pressure to be sealed. These seals can withstand a pressure up-to 10000Psi.
Oil-Seal
These are used to seal various kinds of hydraulic instruments and are available in different
specifications with respect to capacity and power. We supply these Oil-Seals to various
industries at reasonable market prices. We also do customization of these Oil-Seals as per the
client’s specification, ensuring corrosion resistance, high level of thermal and electrical
conductivity.
Spider Coupling:
Abiding by transparent business policies, we are engaged in manufacturing an enormous array
of Rubber and PU (Polyurethane) Spider Coupling in sync with globally laid quality standards
and norms. Our offered array is widely applauded by the users due to its unique features like
ruggedness, accurate dimensions and corrosion resistance. At the time of manufacturing this

range using high-grade material, progressive technology and with the assistance of experienced
professional.
Rubber Ring:
O-Ring: We are highly reckoned as one of the most reliable manufacturer and supplier of a
qualitative range of NBR, Silicon, Viton (FKM), Neoprene, EPDM Rubber O-Ring that is
highly acknowledged across the nation by our clients. The optimum Quality rubber and
sophisticated technology is used in the fabrication process that ensures prominent features like
high strength, dimensional accuracy and durability. These are highly competent of
withstanding high pressure mainly in areas such as hydraulic cylinders. In addition, customers
can also avail these in assorted patterns and dimensions as per the varied specifications
provided by them.
Quad Ring: Quad Ring Seals are four lipped seal with a specially developed sealing profile
that actually provided twice the number of sealing surfaces as an O-Ring. The four lobed design
not only provides lower friction than an O-Ring, but also, due to square cross section, its resist
spiral twist. Quad Ring are available are in a wide range of materials for both standard and
special applications as well as custom seals for unique applications.
Wear-Ring: The function of a hydraulic Wear Ring (or Guide ring) is to guide the piston and
piston rod of an hydraulic cylinder, absorbing transverse forces. At the same time, the Wear
Ring prevents metal-to-metal contact, optimizing the performance of the sealing system. IRI
supplies hydraulic Wear Rings in different materials and specifications to suit a variety of
industry applications. IRI can also custom-manufacture Wear Rings to suit. Wear Rings come
pre-formed, or in strip form.
Back-up Ring : A Back Up Ring is a ring of hard, extrusion resistant material such as high-
durometer Nitrile, Nylon, or PTFE, which is designed to fit between an O-ring and an extrusion
gap, to prevent the extrusion of the O-ring leading to O-ring failure. Extrusion failure is one of
the most common types of O-ring failure. When the internal pressure of an application becomes
too great, the O-ring will actually extrude into the clearance gap. This extruded product will
quickly be nibbled away causing a loss of material, and once sufficient material is lost, seal
failure will quickly follow.
Coupling Bush:
Rubber Coupling Bush Manufactured using optimum quality raw material, these coupling bush
transmit torque via high tensile steel bolts. Owing to their features like high absorbing power
of stock loads, non abrasive and anti corrosive nature, these coupling bush are highly
appreciated and demanded by the customers. The coupling bush offered by us are available in
various sizes and shapes, which help in meeting the variegated requirements of our customers.

Rubber Diaphragms:
Rubber Diaphragm offered feature solid construction; standards and finds use in different
industry sectors. Providing for versatile usage, these can be offered in both standard as well as
custom configuration choices including in-mold bonding of metal/plastic substrates. Further,
these can be offered in different configurations in terms of fluid usage, pressure and vacuum
handling capabilities, mechanical requirements and others. Some of its features include choice
of wide variety of materials like NBR, Neoprene, EPDM and others, suitable for working under
different pressures/liquids/gases, reinforced fabric finish and others.
Rubber Expansion Bellow
Rubber Expansion Bellows are generally custom built as per client’s specification with all
external influences such as oil, grease, dirt, dust, abrasives and weld splatters. These bellows
helps in preventing gas leakage and thereby are demanded in a variety of engineering and
automobile industries. Manufactured using superior quality material, these bellows are known
for exceptional stability & long life.
Anti-vibrations Mounting & Pad:
IRI is a reputed manufacturer and supplier of a huge variety of various type Anti Vibration
Pads. Our products ensure no quality degradation and properties unchanged in any season. We
have been offering technologically advance array in different sizes and dimensions for all
industrial machines.
TheAnti Vibration Mounting & Pad are widely used in number of industries like mining,
mechanical, automobile and all others anti vibration purposes. These mountings are precisely
engineered using high grade material and contemporary machines in compliance with set
industry norms. The offered mountings can be avail by our clients at affordable price from us.
Rubber Strips &Cord:
Silicone/NBR//Neoprene/Natural rubber strips and cords to your exact required size without
any tooling charges. cord sizes from Ø 1.0mm up to Ø 65.00mm. Strip sizes can be produced
up to 200mm wide. A huge range of grades can be offered including Carbon loaded/Anti-static,
Metal Detectable (for the food industry) Low smoke /low toxic (mass transit use) Platinum
silicone, and General purpose, to name a few. (Generally orders are dispatched within 7-10
days of receipt).
Whether you need a profile in the latest high grade for aerospace use, or just 10 meters of
standard 'U' channel to cover that sharp bit, we can help! If you do not know the spec of what
you need, don't worry! Our technical sales staff will be pleased to assist. Our in-house technical
knowledge goes right back to the very early days of silicone production. If your requirement is

for a complex profile where tooling does not exist, you will be surprised how quickly and
economically we can manufacture bespoke extrusions.
Seal Kits & Packing Kits:
We offer wide range of hydraulic seal kits and packing kits, being equipped with qualifying
ineers, these are developed by us as per the defined industrial standard using sophisticated
technology. We have a team of experienced analysts who test these on parameters like speed
of stroke, duty cycle of the equipment, temperature, low friction, expected service life, leakage,
system pressure and media to ascertain their quality.

Chapter: - 6
Factors affecting
Demand for
Rubber Industry

6.1) Demand determination of the Rubber Industry
World demand for natural rubber will probably slow through 2016 as consumption growth
weakens in China, the biggest importer, curbing prices of the raw material used in everything
from tires to medical gloves and condoms. Expansion will moderate to 3.5 percent in 2016
from 3.9 percent this year and 4.1 percent in 2014, according to HiddeSmit, former secretary
general of the International Rubber Study Group. China’s demand will rise 4.8 percent next
year from 6 percent in 2015 and 7.1 percent last year, Smit estimates.
Futures have plunged 75 percent from a record in 2011 as maturing trees in Asia boost latex
production and China’s economy grows at the slowest pace since 1990. The slump in prices
cut costs for tire makers such as Goodyear Tire & Rubber Co. and spurred efforts by Thailand,
Indonesia and Malaysia to restrain supply by limiting exports and felling trees.
“I foresee a continuation of the decline in growth rates in China over the coming years,” Smit
said in e-mails last week. While the surge in new planting from 2005 through 2011 will boost
world supply, consumption will grow at a much slower pace, said Smit, who headed the
Singapore-based IRSG, an intergovernmental organization, from 2005 to 2009.
Futures in technically specified rubber used in the tire industry traded at $1.427 a kilogram in
Singapore on Monday, down from a peak of $5.75 in February 2011. Prices may stay at about
$1.50 to $1.60 through at least 2020, said Smit, an industry adviser. Futures averaged $2.54 in
the past 10 years, data compiled by Bloomberg show.
Lower Costs
Goodyear, North America’s largest tire maker, posted a record segment operating income of
$1.7 billion in 2014, up 8 percent from a year earlier, helped by lower raw material costs, the
company said on Feb. 17.
Rubber prices slid 5.5 percent this year, extending four annual losses. China’s economy has
cooled as officials rein in local-government debt, crack down on graft and strengthen
environmental laws. The targeted expansion of about 7 percent this year would be the smallest
increase since 1990.
“Slowing Chinese growth, particularly in a low inflation environment is a headwind for all
industrial commodity demand, including rubber,” Colin Hamilton, head of commodities
research at Macquarie Group Ltd. in London, wrote in an e-mail.
While Preachy Jumpsuit, managing director of The Rubber Economist Ltd., also sees global
demand slowing, he says he expects production to expand at an even lower rate, resulting in a
shortage of 470,000 tons in 2016.
Global Shortage
The world market will also have a deficit of 449,000 tons this year, the widest since 2000,
which would cut inventories to 2.47 million tons from a record of almost 3 million tons in 2014,
said Prachaya, a London-based industry adviser who has studied the market for more than 30

years.Smit sees a decline in global stockpiles of 70,000 tons this year and an increase of 75,000
tons in 2016.
“I do not see this as a supply shortage but a correction on a rather high stock level at the end of
2014,” Smit said. “There will be a net stock build-up during 2016.” The Rubber Study Group
in Singapore in January estimated a global surplus of 77,000 tons this year and of 51,000 tons
in 2016.
Officials from Thailand, Malaysia and Indonesia, which account for two-thirds of global
production, decided in November to limit exports in an effort to tighten supply. Thailand, the
biggest shipper, is also buying rubber from farmers at above market rates to boost domestic
prices and is encouraging farmers to cut down aging trees.
Global consumption will be 12.75 million tons next year from 12.32 million tons in 2015, while
output will total 12.83 million tons from 12.25 million tons, Smit estimates. Use by China is
poised to increase to 5 million tons in 2016 from 4.78 million tons this year and 4.51 million
tons in 2014.

Chapter-7
Players in Industry

7.1) Players in Industry
Market share of rubber Industry leaders
Apar industry
Apar Industries Ltd was established by Mr. Dharmsinh D. Desai in 1958. It has now evolved
to be a 125 million US dollar diversified company offering value added products and services
in Power Transmission Conductors, Petroleum Specialties and Synthetic
Indag rubber
The Khemka Group founded Indag Rubber during the early 80’s and pioneered the introduction
of pre-cured retreading technology in India. Since then the company has provided re-treading
material to our customers ranging from pre-cure tread to curing envelope
Indag Rubber Ltd. This technology has been introduced in India, by the Khemka Group Indag’s
state of the art manufacturing unit is established in Nalagarh Industrial Estate in Himachal
Pradesh (65 km from Chandigarh Airport).
Indag uses advanced technology in terms of machinery, equipment and raw materials. As a
result, our products give mileage that result in LOWEST COST PER KILOMETER. Our
processes have been certified as.
Apcotex industry
Apcotex Industry is the flagship company under the umbrella of JK Organization JK Industries
has a 17% market share, in terms of revenue, making it the third largest player in the industry.
The Company ranks first in the MHCV and Passenger Car Rubber segments, with 79% and 7%
of its product mix coming from these segments, respectively.
Apar Ind
55%
Indag
Rubber
15%
Apcotex Ind
14%
S R K Ind
7%
Rubfila Intl
5%
GRP
4%
MARKET CAPITAL

Exports account for approximately 17% of its gross sales. The advent of JK Organization on
the industrial landscape of India almost synchronizes with the beginning of an era of industrial
awareness - an endeavor for self reliance and the setting up of a dynamic Indian industry. This
was way back in the middle of the 19th century. And the rest that followed is history.
S R K Industry
Associated Textile Rubber Products Limited (ASTER) was originally Associated Textile
Rubber Products Private Limited which was incorporated in 1991 and later converted into a
Limited Company in 1994. After becoming a Limited Company, in 1995 Associated Textile
Rubber Products Limited had offered its shares to public via an IPO and got listed in Bombay
Stock Exchange (BSE). The name of the company has been changed from Associated Textile
Rubber products limited to S R K Industries Limited in 2011.
Rubfila International
Rubfila International Limited (RIL) is a Public Listed Company promoted by Rubpro Sdn.
Bhd., Malaysia along with Kerala State Industrial Development Corporation (KSIDC) and has
been in operation since 1994. The company is listed in Bombay Stock Exchange (BSE)
since1994.
RIL has two manufacturing facilities at its disposal one at Palakkad, Kerala and the other at
Agartala, Tripura. Rubfila started its operations in 1995 with a single line of production with
an installed capacity of 3000 MT/year and currently has manufacturing capacity of 17000
MT/year at its facilities.
Rubfila is the only Indian manufacturer to manufacture both Talcum Coated and Silicon Coated
Rubber threads. The company has adopted internationally accepted quality standards and its
products are well received among customers both in India as well as around the world. RIL
also produces premium products catering to highly niche' areas like toys, fishing, catherers,
meat packing, medical webbing, bungee jumping cords etc. RIL produces threads with sizes
ranging from 3.1mm (8 count) diameter to 0.23mm (110 count) diameter.
G R P
GRP Ltd, previously known as Gujarat Reclaim & Rubber Products Ltd. (GRRPL), is the
largest producer of reclaimed rubber in Asia and amongst the leaders of the same in the world.
With an extensive experience of over 37 years in the industry and 5 plants strategically located
across India, GRP stands dedicated to building a diversified global corporation committed to
provide sustainable solutions for a green planet, while steadfastly creating value for all its
stakeholders.
Established in 1974, GRP has steadily risen beyond its humble beginnings. Initially functioning
at a modest production capacity of only 2400 MT, today the Company has become India's
largest manufacturer and exporter of reclaimed rubber; producing reclaimed rubber from the

scrap of whole Rubbers, tread peelings, natural rubber tubes, butyl tubes, and moulded rubber
products for different applications in both Rubber and non-Rubber rubber products.
A public company listed on the Bombay Stock Exchange (BSE), GRP delivers efficient
solutions that enable smarter decisions which in turn result in highly effective outcomes.

Chapter- 8
Distribution channel
In Industry

8.1 Raw material cost
Raw material costs account for almost 70% of the Rubber industry’s incomes. Labour cost is
another significant overhead. The Rubber industry has a narrow product range, huge operating
overheads and high break-even levels. Raw material costs for the last three years have been
rising constantly, especially those of rubber and crude oil-linked raw materials. The steep rise
in raw material prices has impacted profit margins of all players. Consistent rise in major raw
materials costs (those of natural rubber, nylon Rubber cord, carbon black, synthetic rubber),
with limited pricing flexibility, has resulted in pressure on margins of Rubber companies,
despite a good topline growth. Consequently, while the revenues showed a healthy growth,
profitability remained depressed. In fact, some of the major Rubber companies are operating
at break-even situations. Rubber Prices In 2005-06, production and consumption of rubber
grew.
Raw material Cost in a rubber construction 2013
8.1.1. Rubber Prices
In 2008-09, production and consumption of rubber grew by5.5% and 6.2%, respectively, while
exports increased by 51.2% (for the same period), on account of the imbalance in the global
demand-supply position. The average domestic price of rubber increased by 20.3%, while the
international prices soared by 31.5% in the same period.In April-June 2009, Domestic-Rubber
prices increased 59% y-o-y, while the international prices increased 76.6%. Natural-Rubber
prices have been continuously on the rise in the international markets, with weather conditions
playing a major role in disrupting supplies.
During FY08, China lost rubber plantations in the Hainan province due to a typhoon in
September 2008, followed by floods in Thailand and Malaysia in December, the same year.
Production suffered in most rubber-producing regions in India, due to bad monsoons, which in
turn led to the soaring of rubber prices. With international natural-rubber prices ruling high,
and India being a part of the global market, exports of rubber from the country affected the

demand and supply positioning in its domestic market. The growth in exports is driving-up
average domestic prices of rubber.
With rising demand from the Rubber sector, the supply situation is expected to remain
constrained in the medium term. Currently, rubber prices have depleted to around Rs 80-levels,
but there is high level of volatility and hence, their behavior is difficult to predict. If current
levels persist, it would result in better profitability for Rubber companies
Rubber Price (Domestic Vs International) 2013
RUBBER prices have suddenly spurted to a four-year high, touching Rs 38 per kg for RSS 4
on Tuesday. This unexpected rise has bolstered the demand for restoring duty free import of
rubber under advance license. Last time, the price reached this level during September 1997.
The rubber market remained steady in July this year with average price for RSS 4 being Rs
33.90. Market trends during the first week of August indicate that the price may move up
further as there is acute shortage of rubber in the market. However, demand is not high enough
to bring about an abrupt price spurt. The market is obviously chasing deficient supply.
One reason for the short supply is this year's thunderous monsoon. For about a month, rubber
tapping has been halted. Rubber plantations in many regions were hit by inclement weather.
Also, the turmoil raised by the introduction of turnover tax (TOT) is another factor. The 1.5
per cent tax imposed on the annual turnover of Rs 30 lakh and above came into force on August
1. This is not transferable to consumers. Traders fear that the levy will drastically erode their
income and make rubber trade unprofitable.
The levy has forced majority of the traders to keep down their volume of business in an effort
to confine the annual turnover to Rs 30 lakh. However, a section of the growers feel that the
current price escalation is artificial. The market's quick march ahead despite high stock in the
country has surprised them. Some of them attributed conscious efforts by the Rubber sector to
push up the price in order to get the ban on advance license imports lifted.

Some growers have also raised an allegation that a few major rubber traders are hoarding rubber
to take the price to the height of Rs 40 per kg, which would indirectly help the designs of the
manufacturers to demand lifting the ban on duty free imports.
The current price is way above the price in the international market. While RSS 4 is traded at
Rs 37 per kg in the country, world price of comparable grades of rubber is fluctuating around
Rs 27.60 per kg. The current stock of natural rubber is estimated to be 150,000 tones, against
the monthly consumption of around 50,000 tones.
8.1.2 Nylon Rubber Cord (NTC) Fabric
Nylon Rubber cord accounts for around 22% of the total raw material costs. During 2008-09,
the production of NTC fabric declined by 12.2%, while its consumption grew by 9%. This
imbalance in the production-consumption pattern has led to a 7.5% increase in domestic NTC
prices in 2008-09. The international prices are much higher than domestic rates and have shown
a 15.2% increase in 2008-09; the price of caprolactam, the main feedstock for NTC fabric,
increased by 6.2% in the same period. However, the average international and domestic prices
during April-June 2010 were lower by 22% and 18%, respectively, due to caprolactam prices,
which declined by 10.8 %.
8.1.3 Other Raw Materials
The prices of other raw materials like carbon black, sRubberne butadiene rubber (SBR) and
poly butadiene rubber (PBR) are closely linked to global crude oil prices.The average domestic
price of carbon black increased by 7.7 % in 2008-09 and the average international prices of
both SBR and PBR increased by 16.9% and 13.4%, respectively, during 2008-09. During
April-June06, the average domestic price of carbon black increased by 27.2% and this
momentum is expected to continue. The average international prices of both SBR and PBR fell
by 10% and 1.4%, respectively, during April-June06. The prices are expected to be in line with
global oil prices.
8.1.4 Hike in Rubber Prices
The rising raw material prices have been the key concern for the Rubber industry, especially
due to the lack of pricing flexibility. Since the Rubber industry is highly competitive and price
sensitive, players have been very conservative about increasing the prices.
However, after the constant rise in raw material costs, almost every player has, in different
tranches, stepped up their product prices. In 2008-09, the average Rubber prices have been
hiked thrice and the cumulative increase in truck & bus Rubbers is 4.6%, in car nylon is 1.2%
and in car radial Rubbers is 5.1%, over the same period last year. The price hikes in 2009-10
have resulted in a cumulative price hike of 20% across all categories, by almost all players,
with MRF an exception, which did not increased prices in July06.

Combined with the price hikes, if the current price-levels of raw materials persist, it would
result in better profitability for Rubber companies. There also exists a possibility of Rubber
companies rolling back the price hikes, since the prices of rubber and oil-related raw materials
have come down. However, it is very difficult to predict rubber and other raw material prices.
8.2 Distribution Scenario
The distribution system consists of distributors, followed by large dealers and also small/sub
dealers. Some Rubber companies also follow a system of appointing C&F agents, in place of
distributors.
8.2.1 Replacement market:
Rubber companies sell Rubbers through widespread dealer distribution net-work (over 5000 in
the country), either through exclusive dealer of the companies or through multi-company
dealers.
8.2.2.1 OEM:
Direct supply by Rubber companies through negotiations.
8.2.2.2 STU:
Direct supply by Rubber companies through tender system.
8.2.2.3 Government:
Direct supply by Rubber companies through tender system. Through dealers in the exporting
countries.
8.2.2.4 Import:
Some Rubber companies also import Rubbers for the domestic market. Such imports are
generally from the principal company overseas or from technical collaborator or from Rubber
companies with which it has an alliance for a particular line of Rubbers, for example, passenger
car tubeless Rubbers; With Rubber import freely allowed, import of various categories of
Rubbers is also taking place. Rubbers are imported by importing agents and then marketed
through the dealers who are marketing Indian Rubbers also.

Chapter- 9
Key Success
&
Current Trends

9.1 Technology up gradation
In Rubber Industry technology up gradation is absolutely critical issue. In the era of
modernization and globalization, there are difficult to find a place or exist into the business
without innovations or up gradation of technology. So, many companies are come by the
certain technology innovations and newer things. In Rubber Industry now a day we find
concepts of Tube-less Rubbers, Environmental Friendly Green Field Rubber, and Anti puncture
Rubbers and So on. We can put this technology up gradation as a major Key Success Factors
in the Rubber Industry.
9.2 Radial Rubbers
Industry likely to focus on the manufacturing of high performance Radial Rubbers. Radial
Rubber provides long life in compare of the other basic Rubbers. And there are threat from the
China and South Korea who are providing the Radial Rubbers with the high amount of
efficiency with the low prices. Some companies are now realizing the importance of this
technology and they are start working in this area. If the companies are successful in production
of Radial Rubber with high efficiency and low price then it will be drives the growth rate of
Rubber Industry at new levels. So, Radial Rubber will be a one of the major Key Success Factor
for the Industry.
9.3 Introduction of new Concepts
Another major Key Success Factor for the Rubber Industry will be a degree of introduction of
new concepts by the players. The pace of the introducing newer concepts will certainly helps
to the Rubber Industry. New concepts like Puncture proof Rubbers, Low Rolling resistance
Rubbers, Environmental Friendly Green Field Rubbers and so on.
9.4 Growth of Automobile Industry
Main source of demands in Rubber Industry depends on the Automobile Industry. So,
Automobile Industry plays very crucial role as a Key Success Factors in Rubber Industry. In
India there are constant and steady growth seems in the Automobile Industry. So we can put
this factor as a Key Success Factor in Rubber Industry.
9.5 Government Policy
Government policy also works as a Key Success Factors in Rubber Industry. It means to say
that how much government is aggressive towards the infrastructure developments? And the
other policies and rules towards the Industry. This factor leads the whole industry in particular
directions.

Chapter: - 10
PESTLE Analysis

10.1 POLITICALAND LEGAL FACTOR:-
Rubber Administration Regulation
All the rubber products manufacturers and producers are under the control of rubber
Administration Regulation. For instance, the rubber administration quality such as high
concentration puir to rubber prior to they are permitted to be used in rubber production.
Human Rights Issue
Multinational corporations are facing different human rights issues, rules, regulations, laws and
policies of different governments in operating countries.
Waste management and public concerns
Increasing environmental consciousness is most important to growing legislation. The firm’s
operation is exaggerated by federal legislative applications that concentrate on the four
objectives.
Decrease the quantity of material inflowing the nation’s solid waste management system.
Diminish the consumption of natural scarce resources.
Increase the reuse and recycling product packaging materials.
To shelter the natural environment and human health from undesirable effects related with the
dumping of product packaging materials. For instance, Connecticut has now passed a law that
controls packaging to enlarge its recyclability.
The Indian rubber sector has witnessed a number of changes since 1991-92 as a result of
liberalization and globalization measures introduced. Some of the new developments occurred
during 1991-2001 are as follows.
1) Government decision to stop the buffer stock of rubber through the STC in 1991-92.
2) Allowing manufacturers to import rubber under Advance License Scheme till February 1999.
3) Permission toimport new and used tires.
4) Permission to import polyurethane
5) Uncontrolled production, import and consumption of synthetic rubber
6) Reduction in import duty.
7) High import of rubber products

10.2 ECONOMIC FACTORS:-
The main factors taken into deliberation are the market risks, which a tegaindia company is
bared to commodity prices, foreign exchange rate and interest rate. These elements are
described as follows.
 Commodity prices
 Foreign exchange & global economic conditions
 There are many tree cuted then also directly impact by environment issues
 Many complication are there in environment
A) About 65% of NR consumption belongs to a few big rubber manufacturer they are
highly organized and economically and politically powerful. Therefore, they are able to exert
considerable influence on the demand side of NR in India
B) The country is saving over Rs.2000 crores annually in foreign exchange through Production of
about six lacks tons of NR, a very vital strategic raw material. Needed for the industrial
progress"
Foreign exchange & global economic conditions
Operating in global environment is not as easy as operating in local market, because it involve
the exposure to currency exchange rates variations. This generally affects the interest rate,
economic growth, government actions inflation and other economic factors. These changes
could affect the tegaindia for rubber industry to adjust their operating and financing strategies.
Variations in global currency exchanging rates and macro-economic conditions could affect
the international operating profits and business of the tegaindia in rubber industry.
Interest rate
Forklift Seats & Forks could control their general financing in term of harmonizing risks and
investment opportunities. To minimize overall borrowing costs firms in beverage industry are
using currency swaps and interest rate to significantly adapt the rates in order to minimize the
borrowing cost.
10.3 SOCIO-CULTURAL FACTORS:-
Now-a-days consumers are not brand loyal as they were previously, now they can easily switch
to another product. Consumer choice for Solid Press-On Tires Solid Industrial Tires Is affected
by two major characteristics such as ethnicity and age. Due to quality reason, age factor plays
very important role when choosing a Solid Press-On Tires. Some studies have been conducted
and found that in general may result profit problems specially, kidney stones. In compare to
adults, house specially teens and twenties have fewer interest spans for products and have a

preference of products that seems different and to be fun. Now players in rubber industry
changes to non rim products for instance Mold Design and Creation, Rubber to Metal Bonding,
Fabric Reinforced to Rubber Molding, Cured-On Wheels etc.
 The country is saving over Rs.2000 crores annually in foreign exchange through production of
about six lacks tons of NR, a very vital strategic raw material needed for the industrial
progress".
 Allowing manufacturers to import rubber under Advance License Scheme
till February 1999
 Permission to import polyurethane
 Low Bound Kate of 25% for rubber as per the WTO Agreement
 Unabated import of NR even after the cancellation of Advance License Scheme in Fe bruary
1999
10.4 TECHNOLOGICAL FACTORS:-
Technological advancement in manufacturing and new quality improvement concepts such JIT,
Six Sigma etc are the significant providers to improve efficiency of bottling operations and
quality of products. Advancement in technology also helps to introduce new product lines for
example new product launch brands that meet changing customer style, preferences and uses.
In rubber industry distribution process is a big challenge because process can be able to place
the right products at right time.
In tire industry technology can provide a competitive advantage, if it is applied in area such as
logistic products into stores less extravagantly and costs beyond the distribution pipeline while
increasing sales information availability.
10.5 ENVIRONMENT FACTORS
MAJOR ENVIRONMENTAL PROBLEMS
High concentration of BOD, COD, & SS

Chapter-11
Porter’s Five Force
Model

The demand of most raw material
Especially rubber is high,
While supply is restricted
High competition pressure due to high
Bargaining power of OEMs and wide
Brand choice in the replacement
market.
Porter's Five Forces Model
Supplier Power-High
Barriers to New Competitive Threat of Substitutes-
Entrant-High Pressure-High Low
Capital- intensive Top six players enjoying Import Especially from China.
Distribution Network over 80% of total market Rubber is a great substitute for
Low operating Margin share Indian Rubber industry
Branding
High

11.1 THREAT FROM THE NEW ENTRANTS: - Moderate
Sr. No. Factor Threat
1 Capital Requirement:-
The capital-intensive soap industry the biggest barrier to entry is
access to finance.
High infrastructure setup costs. Low
Heavy licensed fee
Big investment for in terms of technology, and land-building.
The Rubber industry suffers from high exit barriers, mainly due to its
specialized equipment. Exit can be a cause of high loss to firm.
2 Demand Side Benefits of Scale:-
The buyers i.e. house hold are having faith on the Rubber they are
using. They communicate to each other the results and benefits of Moderate
Rubber. Hence always has tendency to buy what their family and
friends are buying. Hence for new entrant is little bit moderate to
break this attachment.
3 Customer Switching Costs:-
It is low. When customers are using any Rubber, they are well Low to
known about the results so the brand loyalty is there, also for that Moderate
soap they have using if price or quality will change compare to
other so switch over ratio will moderate because of fairness and
skin conscious customers .
4 Customer Loyalty:-
Existing firms have good image for customers. Low
Existing players have the Knowhow to serve their customers.
In this situation, the customer may not relay on new player that do
Not have brand name. So, the acceptance rate of new players
Somewhat lower.

5
Government Policy:-
The government’s policies are affect to the new entrants because of
regulation body are same for every new and old Rubber making
companies.
High

Factors Attractiveness
Low (1) Low to Moderate Moderate High (5)
Moderate (3) to high (4)
(2)
Capital Requirement
Demand Side Benefits of Scale
Customer Switching Costs
Customer Loyalty
Government Policy
Some of score 2 3 3 5
Total score 13
Number of factor 6
Average score 2.6
So over all we can say that the competitive force from new entrance is moderate which is
supported by the average score 2.6

11.2 BARGAINING POWER OF SUPPLIERS- Moderate
Sr. Factor Threat
No.
1 Number of firms:-
Suppliers have good bargaining power over rivals whenever the items High
they provide are available on the open market from few suppliers with
ample capability to fill orders.
Here the suppliers of Rubber industry are few so their bargaining power
is moderately high.
2. Firms can’t influence market prices:-
Firms can’t influence the market price because of the competition in Low
between the competitors.
3. Switching Cost:-
Suppliers switching cost is high than it is difficult to change suppliers Low
and because of long term agreement firms get many other advantages.
4. Differentiation of Inputs of Suppliers:-
In this industry any supplier does not provide any different inputs
Moderate
because if any suppler find new invention then another suppler easily
imitates that invention in few times.
5. Backward Integration:-
Suppliers are not using backward integration than this factor not affect to
the Rubber industry.
Moderate to
high

(2)
Number of firms
Firms can’t influence market prices
Switching cost
Differentiation of inputs of suppliers
Backward integration
Some of score 2 3 4 5
Total score 14
Number of factor 5
Average score 2.8
So over all we can say that the competitive force from bargaining power of suppliers is
moderate which is supported by the average score 2.8

11.3 THREAT FROM SUBSTITUTES PRODUCTS- Low to Moderate
1 Substitutes major challenges:-
For Rubber industry there is Chinese Rubber substitute is available but it
is High
Effective than commercial Rubber.
2 Less buyer tendency to substitute :-
The most of buyer are unaware about substitute. Therefore there is less Low
Inclination toward the product.
3 High cost of switching to substitutes:-
The buyer cannot easily move to similar product at the same benefit. Low
(2)
Substitutes major challenges
Less buyer tendency to substitute
Animal fatty acid not suitable for
commercial Current scenario
production
Sum of score 2 5
Total score 7
Number of factor 3
Average score 2.3
So over all we can say that the competitive force from substitute products is low to moderate
which is supported by the average score 2.3.

11.4 BARGAINING POWER OF BUYERS- Moderate to High
1 High buyer profit:-
India’s customer are mainly use favorable price Rubber which are comes High
Under their price range because of competitive market.
2 The Switching Cost:-
Customers switching cost are moderate. Moderate
3 Brand Preference:-
Many Customers are aware about the product brand so loyalties are Low to
possible and customers more believes on families brand product Moderate
Company.
4 Bargaining Power of Buyers:-
Bargaining power of buyers is High because of switching ratio are more High
in similar category products.
(2)
The Number of Buyers
The Switching Cost
Brand Preference
Bargaining Power of Buyers
Sum of score 2 3 10
Total score 15
Number of factor 4
Average score 3.7
So over all we can say that the competitive force from bargaining power of buyers is moderate
to high which is supported by the average score 3.7.

11.5 RIVALRY AMONG THE COMPETITORS: -Moderate to High
1 Number of Firms:-
There are many number of firms are producing Rubber. High
2 Switching Cost:-
In this factor the switching cost is high than buyers cannot easily Low to
Change the company. Moderate
3 Product Differentiation:-
In Rubber industry there is no differentiation all the company making the
Moderate
same kind of Rubber
to High
4 Exit Barrier:-
In Rubber industry is also base on capital intensive than exit barriers also High
High.
5 High fixed Costs:-
Rubber industry the high capital investment required means fixed cost is High
high compare to variable cost because it is based on capital intensive
Production.

(2)
Number of Firms
Switching Cost
Product Differentiation
Exit Barrier
High Fixed Costs
Sum of score 2 4 15
Total score 21
Number of factor 5
Average score 4.2
So over all we can say that the competitive force from rivalry among the competitors is
moderate
To high which is supported by the average score 4.2.
Attractiveness of industry by the competitive environment analysis
Competitive Forces Attractive score
Threat from the New Entrants 2.6
Rivalry among the Competitors 4.2
Bargaining Power of Suppliers 2.8
Threat from the Substitute Products 2.3
Bargaining Power of Buyers 3.7
Total 15.6
No. of factors 5
Average score 3.12
According to competitive forces analysis, we can interpret that the attractiveness of industry is
moderate according to average attractive score of Rubber industry which is 3.12.

Chapter-12
BCG matrix

12.1 BCG Matrix
 The Boston Consulting Group, a leading management consulting firm, developed in the
1960s.Which is best known as growth- share matrix? It analysed the impact of investing
resources in different business on the corporation’s future earnings and cash flows. Each
business is positioned within a matrix, as shown below. The vertical axis indicates the market
growth rate and the horizontal axis shows the business’s relative market share.
 The growth share matrix assumes that a firm must generate cash from business with strong
competitive positions in mature markets. Then it can fund investments and expenditures in
industries that represent attractive future opportunities. Thus, the market growth rate on the
vertical axis is a proxy measure for the maturity and attractiveness of an industry. Similarly, a
business’s relative market share is a proxy measure for its competitive strength within its
industry. It refers to the SBU’s market share relative to that of its largest competitor in the
segment.
The growth share matrix is divided into four cells, each indicating different types of business.
1. Question marks
2. Stars
3. Cash cows
4. Dogs

Indian Rubber Industry growth rate is 70%.
COMPANY NAME SALES (Rs. in crore) RELATED MARKET SHARE (%)
MRF Rubbers ltd. 8589.7 30%
Apollo Rubbers ltd. 5490.5 19%
Ceat ltd. 3468.9 12%
J.K Rubbers ltd 4810 9%
EXPLANATION
The Indian Rubber industry annual market growth rate is 70% in the year 2012-13.
The relative market share of MRF Rubber is leader among all the Rubber Company as it is
having the share of 30% so it falls under the star category.
The relative market share of Apollo is 19%, Coat Rubber ltd. is 12%, and JK Rubber is 9%, so
all of this falls under the Question Mark market category.
So we can say that MRF is the market leader and is having the position of star position it means
that its market relative market share is higher than all other Rubber company.

Chapter-13
OT Analysis

SWOT Analysis Definition
The SWOT Analysis is a strategic planning tool that stands for: strengths, weaknesses,
opportunities, and threats. The SWOT analysis is essential to understanding the many different
risk and rewards of any investment. Analyst, investors, students and professionals or all types
can use a SWOT analysis to categorically break down a project or businesses' strengths,
weaknesses, opportunities, and threats.
Opportunities
Growing Economy - --Growing Automobile Industry ----Increasing OEM demand ---
Subsequent rise in replacement demand
Growing Automobile Industry
Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898, the Automobile
Industry of India has come a long way. During its early stages the auto industry was overlooked
by the then Government and the policies were also not favorable. The liberalization policy and
various tax reliefs by the Govt. of India in recent years has made remarkable impacts on Indian
Automobile Industry. Indian auto industry, which is currently growing at the pace of around
18 % per annum, has become a hot destination for global auto players like Volvo, General
Motors and Ford.
A well-developed transportation system plays a key role in the development of an economy,
and India is no exception to it. With the growth of transportation system the Automotive
Industry of India is also growing at rapid speed, occupying an important place on the 'canvas'
of Indian economy.
Growing OEM demand
Traditionally, the replacement market has been the main growth driver for the Rubber industry,
as also the major segment that consumes Rubbers; however, with the recent escalation in auto
sales, OEM demand too, has been on a substantial increase, thus enlarging its share in the sales
pie. Auto sales have been growing at a CAGR of 15.8% during 2002-06, which has driven the
growth in the Rubber industry, keeping the OEM demand buoyant. Going forward, the
automobile industry is estimated to grow at double digits. This, in turn, is expected to keep
demand, for Rubbers from OEMs, buoyant. Looking at the global rail-to-road cargo scenario,
in Europe, roadways have an 84% share, while in India, currently, the ratio is 35:65, which was
62:38, two decades ago. Also, with growth in roadways and with projects like Golden
Quadrilateral and NSEW getting implemented, there would be a further shift in freight
movement, from railroad to roadways. This would lead to an increase in demand for
automobiles and hence, the OEM demand for Rubbers.

With continued emphasis being placed by the Central Government on development of
infrastructure, particularly roads, agricultural and manufacturing sectors, the Indian economy
and the automobile sector/ Rubber industry are poised for an impressive growth. Creation of
road infrastructure has given, and would increasingly give, a tremendous fillip to road
transportation, in the coming years. The Rubber industry would play an important role in this
changing road transportation dynamics
Threats
Continuous increase in prices of natural rubber, which accounts for nearly one third of total
raw material costs so it become a big threats again industry.
Cheaper imports of Rubbers, especially from China, selling at very low prices, have been
posing a challenge. The landed price is approximately 25% lower than that of the corresponding
Indian Truck/ LCV Rubbers. Imports from China now constitute around 5% of market share
With crude prices scaling upwards, added pressure on raw material prices is expected
Ban on Overloading
Industry estimates say that nearly 15% of Commercial Vehicles are overloaded to the extent of
100-150%, which results in a higher wear and tear of Rubbers. The recent Supreme Court order,
to curb the overloading of trucks, is expected to affect the demand for MHCV Rubbers, in both,
the replacement and OEM markets. On account of the ban on overloading, the life of a Rubber
would increase and also, Rubbers that are not overloaded would further enable re-treading,
before being replaced.
Hence, the replacement demand may come down. However, the curb on overloading is
expected to lead to additional truck sales, as also the demand for multi-axle vehicles would
rise. This would lead to higher OEM demand. So, in the short term, ban on overloading could
be a dampener, but in the long run, it is definitely a positive move. The
Ban would also provide a fillip to Radicalization.
Cyclical nature of automobile industry.
 Threat from imports
 The increase in import of cheap Chinese Rubbers last quarter has resulted in the fall of Rubber
prices by over 25 per cent in the market. Rubbers majors, including MRF and Metro, may
oppose the entry of Chinese Rubbers, but the world’s top Rubber makers — Michelin and
Bridgestone have announced to import top-end radial Rubbers for trucks and buses
to supply across the country.
 The recent easing in import norms for Rubbers is another bother for local Rubber producers.
There is hardly any major duty differential between the import of Rubbers and Rubber-inputs.
Moreover, Rubber imports from a few Asian countries enjoy a further concession of 5 per cent
under the Bangkok agreement.

 As a result, local Rubber producers face the threat of cheaper imports. Fortunately for them,
the threat is confined broadly to the radial Rubber segment. Considering that India is a major
maker and exporters of bias Rubbers, local producers do not face the import threat in this
segment.
 However, it would be a bit premature to take a firm view on the extent of import threat. Local
producers have been working, and have also managed, to match international companies in
terms of product quality. This, coupled with a sharp depreciation in the value of the rupee, has
stemmed the flow of imports.
 However, from the long-term perspective, the flow of cheaper imports is a major threat to the
domestic industry. Top global majors, such as Goodyear, Bridgestone and Michelin, have huge
capacities spread across the globe. With import norms being progressively relaxed, these
companies may find it lucrative to have a presence in India.
 Such a trend is already evident in the cases of Michelin and Bridgestone. Bridgestone has set
up a unit in India and is concentrating on the radial Rubber segment. It has also decided to
market imported Rubbers from its overseas parent. Industry sources also point out that
Michelin has started marketing its product in India, albeit in a very low-key fashion.

Chapter- 14
Future out look

The Rubber 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, Rubbers are already being
imported into India.
Nevertheless, while the Indian Rubber industry does lack scale, the Rubber companies
themselves have proven to be very competitive. What is especially encouraging is the vigor
with which the Indian Rubber 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 Rubber industry-bias
truck and bus Rubbers - will be threatened by the shift towards radials. We are confident that
the continuing innovative efforts of our partners in the Indian Rubber industry will produce the
necessary results that allow them to continue to perform credibly in the future as well.
14.1 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 slowdown 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 Rubber 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 Rubber 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 Rubber 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.

Chapter- 15
Conclusion

 Indian Rubber Industry is performing well in the Indian economy. It is also provides very good
amount of the employment and technology innovations. The industry is definitely set to grow,
with an estimated volume growth of 12-14% in 2006-07. The industry is definitely set to grow,
with an estimated volume growth of 12-14% in 2006-07. Both, OEM and Replacement demand
would drive growth, with exports.
 The growing economy and the infrastructure sectors provide the much-needed force. However,
Rubber companies face competition, together with price and cost pressures. Pricing pressure,
from OEMs because of their high bargaining power and in the replacement market due to huge
competition, is a substantially reduce. Companies are now giving emphasis to innovation in
product and process technology and to operational efficiencies. However, the continuously
rising trend witnessed in the prices of raw materials remains an area of concern.
 Though the rubber prices have come down from their peaks of Rs 115, to Rs 82 currently, the
trend is very volatile. Rubber companies would definitely show improvement in the margins,
sequentially, and if prices remain at these levels, profitability would improve. But then, it is
highly dependent on the prices of major raw materials like Rubber, Carbon Black, NTC Fabric,
SBR and PBR, which are highly volatile. However, with surging automobile sales, if demand
for Rubbers increases without the supply catching up with it, then, prices of Rubbers are likely
to increase. This may provide some benefit to the Rubber companies. The industry is definitely
set to grow, but the huge competition, huge buyer power, and pricing inflexibility and cost
pressures. Rubber companies are operating at very thin margins and their return ratios are also
not attractive.
 Currently India exports Rubbers to around 65 countries and this is expected to increase
significantly during the current financial year. Though the growth has been lower than when
compared with 2005-06 and 2006-07 when the overall growth was around 7 per cent, there is
nothing to worry about as couples of companies are in expansion mode and also they are
catering to the increasing domestic needs.
 The consolidation of the Indian Rubber industry is likely to continue in the coming years
through mergers among existing players.
 The industry is likely to expand through a combination of organic and inorganic growth. While
organic growth would come from raising efficiency levels, inorganic growth would be achieved
through alliances and M&As. The scooter Rubber exports grew 10.53 per cent to 3, 20,536
units compared with 2, 89,984 units in 2006-07. According to current trends exports of truck
and bus Rubbers declined 5.5 per cent to 22, 76,049 units during the year as against 24, 08,759
units the year before.
 The main threat to the industry is the price of its raw materials, most of which are petroleum
by-products. Carbon, synthetic rubber and nylon Rubber cord are offshoots of petrochemicals.
Thus, the future of the industry will swing with the supply of crude oil.
 In the domestic market, Rubber manufacturers are expected to increasingly focus on expanding
their dealership networks & explore possibilities of tie-ups among themselves to penetrate the
growing customer base. They are also likely to pursue innovative measures (such as "dial-a-
Rubber service and road shows) to improve customer awareness. According to estimates, major
Rubber companies in the country export 20 per cent of their truck Rubber production and the

continuous up gradation of quality has resulted in greater acceptance level for Indian Rubbers
in various countries
 The biggest threat, however, is yet to fully materialize. It will be from global majors like
Bridgestone and Michelin, which control 36 per cent of the global Rubber market. These
players have set up their bases in Southeast Asia and the slump of the markets in this region,
coupled with the vast growth potential of the Indian market, is attract them towards India.
 Bridgestone has tied up with ACC for a 100 per cent radial Rubber unit and Michelin is also
marketing its products through retail outlets. The industry is driven more by volumes than by
margins and each of the big five in the global Rubber industry Continental, Michelin,
Goodyear, Pirelli and Bridgestone generate an annual Rubber production equivalent to the total
demand of the Indian market. These MNCs have deep pockets and can easily withstand losses
for 2-3 years. Their financial muscles also permit them to invest in R&D, which is beyond the
reach of the average Indian Rubber manufacturer.
 Overall Indian Rubber Industry is enjoying the fruits of more sales in the replacement market
when the input cost is comparatively lower. Since the commercial vehicles replace Rubbers
twice a year, we have received the full impact of the price rises affected during the first and
second quarter of the last year.

Chapter- 16
Bibliography

BOOKS:
“Crafting and Executing Strategy” Special Indian Edition), 14th
Edition, TMH Production.
(Thomson Arthur, A. J Strickland, Gamble E John, Arun K. Jain)
 WEB SITES:
www.way2wealth.com
www.indiainfoline.com
www.atmaindia.com
www.wikiwealth.com
www.moneycontrol.com
 WEB LINKS:
http://www.atmaindia.org/Export.htm
http://www.atmaindia.org/Radialisation.htm
http://www.atmaindia.org/Redreading.htm
http://ia.rediff.com/money/guest.htm
http://www.mindbranch.com/catalog/find.jsp
http://www.domain-b.com/industry/Rubbers/200012_Rubber_industry.html
http://www.thehindubusinessline.com/iw/200/10/13/stories/2002101300791300.htm
http://www.researchandmarkets.com/reportinfo.asp?report_id=367804
http://www.rediff.com/money/2003/nov/22spec.htm
http://www.ibef.org/industry/gemsjewellery.aspx http://www.atmaindia.org/Export.htm
http://www.atmaindia.org/Radialisation.htm
http://www.atmaindia.org/Redreading.htm
http://www.indiamarkets.com/imo/industry/rubber/Rubbers/Rubbers.asp?display_content_link=0
&search_l ink=0#top

A Comprehensive Project report on Rubber Industry

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