A correction from Georgie

Georgie, the former Technical Director of MRF, and a regular correspondent, had a small correction to make about my story about Kochappachen.

"Thank you for the wonderful descrption of what has
happened at MRF, some years back. But one correction.
800 and 3000 tyres mean nothing in tyre industry. It is
the tonnage that differentiates one tyre factory from another.
For example, 3000 scooter tyres may be equivilanet to 50
or 60 truck tyre or 2 off the road tyre. It is the tonnage
that brings in money. You pay for raw materials in tonnage
and price is roughly related to tyre weight. To explain it
more simply, when T.Thomas left, the turnover/ year was
around Rs. 50 crores. When I took over it was 100 crores.
This was taken up to 2400 crores when I left. You can see
the difference, when you count things in numbers and
tonnage. regards georgy"

Truly an outstanding performance to jump from Rs. 1000 million (Euro 20 million) to Rs. 24000 million (Euro 480 million). That was only one factor that made Georgie, in my mind, one of the greats in the history of MRF. There were other contributions made by Georgie, such as the establishment and organisation of Devon Machines to produce tyre moulds, and an exceptional story about the levels of imports to set up the Goa factory.

I was in Delhi when Kochappachen arrived to meet the Directorate General of Technical Development (DGTD), to discuss the imports required to set up the Goa factory. Dunlop was also setting up a similar size facility. They had had a meeting the day before with the DGTD. They presented plans and the level of imports of machinery was some astronomical figure - Rs 100 million (Euro 2 million), if I remember correctly.

So when Kochappachen went to meet DGTD and presented an import request which was less than a tenth of what Dunlop had demanded, DGTD was extremely suspicious of the MRF plan.

I was quite close with some of the DGTD technical people at that time. In the evening, when we were together at the Guest House, Kochappachen was looking troubled, and explained his worries.

I rang one of my friends. I explained to him that MRF had no interest in importing machinery at high prices as they had no interest in making money on machinery brought from outside India. Dunlop had its own machinery suppliers (sister companies) in the UK which required profitability levels of theirs to be met.

Although sceptical about my explanation, it was accepted.

The real reason for the low import request from MRF was that Georgie had started an indigenisation programme which was extremely successful.

But returning to the discussion about production figures, my comment was when there was just one factory (MRF now has at least 5 production centres that I know of) and the company was struggling to keep that going to just break even on costs. There were no scooter tyres being produced that I can remember. There were only a marginal number of car tyres being produced, as there were severe quality problems. The bulk of the production was truck tyres. Whatever production planning tried, they could not get the output up to levels to reach what was understood as break even production.

Again, if my memory serves me right, the break even was then calculated at around Rs 400 million (Euro 8 million) for the one factory, not counting the financial contribution from the extremely profitable retread compound production, which was actually what was then keeping the tyre factory afloat. MRF held over 50% share of the market for retread compound at that time.

I replied Georgie thus:

"Dear Georgie,

Thanks for the correction. I will add a note later today.

I do remember making a calculation based on the product
mix for different years. That was in 1969 December - was
it Mr Ramana who was in the factory then?

I traced the production figures for each month over the
years and that was why those figures stuck in my mind.
I was looking at the packaging and other materials
requirements at that time. I also remember doing some
calculations based on the tube production.

However that was so long ago and I moved away from
tyres to plastics, that I just forgot that part of my work at
MRF!!

I stand corrected.

Regards

Sushil"