"Our new office started operations from this Monday. The Dubai office will be looking after the entire UAE region and Pakistan. It will also be a sort of gateway to Europe,' executive director (marketing) and company spokesman, Philip Eapen, said here. Asked about competition from global majors in the UAE markets, Eapen said MRF would be able to stand its own in the arena which boasts of top companies like Michellin and Bridgestone. "In fact, we already compete with them in Pakistan and in the Latin American markets. So it is nothing new for us."

On the current situation in the tyre industry, Eapen said MRF was not unduly worried over the fall in quarter-on-quarter profits for the second successive quarter in the current fiscal (Oct-Sept) 1999-2000 as profits came despite continuing recession in the heavy and commercial vehicles industry.

"We have not made losses. Our profits have only been pared marginally in both the quarters (Oct-Dec and Jan-Mar). Over the first six months of the current financial year, we have profits of Rs 40.93 crore on sales revenue which has gone up to Rs 1,118.67 crore in the first six months from Rs 1,101.07 crore a year ago," Eapen said.

Further, the latest profit figures had to be seen in the light of the windfall that tyre companies got last October in the form of lowest-ever rubber prices globally, he said adding that currently rubber prices were moving northward.

"As against such low rates as Rs 25 a sheet in October last year, the prices have been steadily moving up in the international markets over the past few months and are currently around the levels of Rs 45 a sheet," he said.He said the company stepped up production over the past six months by about 20 per cent to feed the overseas markets, especially Pakistan and UAE.

Currently, MRF exports to some 65 countries and in 1998-99 (Oct-Sept), it had notched up sales worth Rs 152 crore from its export initiatives. "We are essentially looking at countries where the road conditions are akin to those in India," Eapen said while justifying the choice of Pakistan and Latin American countries for MRF's export thrust launched about two years ago to offset flat domestic demand.

The company had recently announced first half results whereby its sales turnover had risen to Rs 1,118.67 crore from Rs 1,101.07 crore with post-tax profits coming down from Rs 55.72 crore from Rs 40.93 crore.

"In fact, the low rubber prices in Oct-Dec quarter last year had its effect on our figures right through the year," Eapen said, adding that the industry would take some more time to pick up from the severe recession that had taken a toll over the last two years. He exuded confidence that MRF would end this year on a robust note with very little change in profits despite the fact that rubber prices had again moved northwards and other raw materials like carbon black and nylon tyre cord were more expensive.

He, however, ruled out any increase in tyre prices in the near future and said MRF would prefer to wait and watch the industry trends before deciding to pass on some of the increased costs to the consumer. On the domestic scenario, Eapen said things still looked bleak and though there had been a smart recovery in the passenger car and two-wheeler segments, the `all-important' truck industry had seen virtually no growth.

"It is only when demand for trucks and other commercial vehicles show a revival that one can safely suggest a sustained recovery of the economy," Eapen said.