In an exclusive interview, Kannan Prabhakar, chief of projects at Apollo Tyres Ltd. and winner of the HIPA Partnership Award at the BBJ Expat CEO of the Year gala, tells the Budapest Business Journal how the Indian company has brought its “One Family” values to Hungary and seen them embraced by locals.
BBJ: The HIPA Partnership award is presented to the multinational company that does most to involve Hungarian suppliers in its value chain. What does this involve in Apollo Tyres’ case?
Kannan Prabhakar: As a company with a strong value system, we believe that our suppliers are our partners in our growth journey. Further, we engage with the local suppliers to build the foundation of a strong company. In Hungary also, we have a lot of Hungarian suppliers on board working with us in multiple areas, including tooling, material handling, material suppliers, logistics, maintenance, employee transportation, catering and many other areas. Right from the project stage, multiple Hungarian suppliers, design consultants and contractors were an integral part and played key roles in setting up the factory. Our “One Family” value means that we extend the concept of family not only to our employees but to our suppliers, customers and all stakeholders.
BBJ: You are the first Indian to win an award at the Expat CEO gala. What message do you think this sends?
KP: I think it was the vision of our chairman Onkar Kanwar and vice chairman Neeraj Kanwar to set up the plant in business-friendly Hungary, and hence it is a big honor for me and the company. I hope the recognition to Apollo Tyres will send a positive message to companies in India who are planning to make a foray into the European market. Currently, Indian companies continue to play an important role in Hungary’s 5% GDP growth in the third quarter, which is more than double the European average.
BBJ: In announcing you as the winner, HIPA president Róbert Ésik said two other Indian companies had invested in Hungary based on your experiences. Who are they, and how did this come about?
KP: I think the two companies are Flex Films and SRF. I think that the Hungarian government continues to work with Invest India, the investment promotion and facilitation agency in India and would have shared our experience in Hungary. With SRF we have a long association, and we shared with them our positive experiences in Hungary, the government support and the general environment in the country.
BBJ: Hungarian is a famously difficult language, and not part of the Indo-European family. How is your Hungarian? Do you have time to take lessons?
KP: Yes, initially I did take lessons to learn the language. But, I had to leave it midway given the massive scale of the Apollo Tyres plant and the tight deadlines to complete it. Now that the plant has started producing and achieving stability, maybe it is time to start learning the Hungarian language again.
BBJ: And are there similarities in the way Indians and Hungarians go about their work?
KP: I was reading recently that the Huns and Chauhans in India might have a common bloodline. Even though Hungary for Indians and India for Hungarians as tourist destinations are a recent phenomenon, after living in Hungary for some time, I see a lot of similarities. Like the Indians, Hungarians are proud of their culture and their past. Both are hard-working and love taking on challenges.
BBJ: In your winner’s speech, you talked of the business here going better than you could have expected. What were your initial expectations, and what are the plans for the future?
KP: Our first experience in Hungary was in 2008, but we could not go ahead with our proposed project then due to the economic downturn in Europe and other factors. So, certainly we were nervous and anxious when we decided to build our first greenfield plant outside India in Hungary. However, we were overwhelmed with the support we received from the government. The professional business environment helped us to set up the plant and start production smoothly. Importantly, the people have welcomed us with open arms and we think we are going to be part of the growth journey of the area and the country.
BBJ: How do you consider the Hungarian regulatory environment regarding predictability and investor friendliness?
KP: We are grateful for the support extended by the Hungarian government for the project and officials have co-operated with us in a professional manner.
BBJ: Everyone in Hungary talks about the challenges presented by the labor crisis. How is Apollo Tyres coping?
KP: Tire manufacturing is not as prevalent in Hungary as other industries, so the market has not produced the appropriate mass of qualified workers yet. Therefore, it has not been an easy job to find qualified employees. Due to this fact, we started the process even before finishing the factory itself to engage with potential employees and get them involved with the plant. For this we tied up with universities and offered internships in the factory. Further, we have taken many employees to be trained in India and the Netherlands.
Apollo Tyres has practices which can be benchmarked with the best companies in the world and we bought these to Hungary and, as a result, have been able to hire and retain people.
The HIPA Partnership Award goes to the CEO of the local branch of a multinational company deemed to have done most to involve Hungarian companies in its value chain. Apollo Tyres opened its EUR 475 million greenfield factory at Gyöngyöshalász, 79 km northeast of Budapest, in April 2017 (the Chain Bridge in Budapest was lit in “Apollo purple” at night to mark the occasion). Truck tires were added to the production palette in September 2018. According to the company website, Gyöngyöshalász will “reach the planned capacity for Phase I by 2019”.