The General Tyre and Rubber Company

The General Tyre and Rubber Company of Pakistan Limited was incorporated in Pakistan on March 7, 1963 as a private limited company and was subsequently converted into a public limited company. GTYR is engaged in the manufacturing and trading of tyres and tubes for automobiles and motorcycles.

Net sales in value terms for the first quarter ended September 2021 was Rs. 4.23 billion as compared to Rs. 3.19 billion in the same period last year, showing growth of 33 per cent.

Better sales growth is mainly due to enhanced focus on replacement market (RM) coupled with gradual picking up of economic activity and lower availability of smuggled tyres.

The export sales of the company for the period were Rs. 17.9 million as compared to Rs. 29.3 million in same period last year. Lower sales from last period is mainly due to law and order situation in Afghanistan in period under review. It is expected that with improvement in law & order situation, the export sales would gain momentum.

SBP has increased the discount rate, which will marginally increase the financing cost of the company. Moreover, since last couple of months rupee is losing its value against US Dollar. Sustainability of economic activity, coupled with the stability of exchange and financing rates are key factors for future profitability.

Lately under invoicing has increased substantially, which is not only impacting local industry but also depriving government of its due tax revenue. In August 2021, the Import Trade prices (ITP) of tyres were updated, last time such exercise was carried out in 2018.

This was necessary to reflect the impact of increase in raw material pricing. FTYR management hopes government will continue its efforts to curb smuggling and ensure proper classification of tyres in appropriate categories of ITP. This will not only result in higher tax revenue for the Government but will also provide level playing field to the local industry and will be helpful in providing employment.

In the last several months, raw material prices have increased significantly. This is mainly due to sudden increase in global demand post first wave of COVID and also because of containers shortage resulting in significant increase in sea freight.

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