If and when the Chennai-based tyre major MRF breaches the $1 billion turnover mark this year (gross turnover touched Rs 4,200 crore in 2005-06), it is sure to make news. But for the moment, the spotlight is on the company’s plan to realign its advertising spends among select agencies.

The buzz doing the rounds in agency corridors is that the company is rejigging its Rs 50-crore annual advertising spend (which included celebrity endorsements). In the rejigging process, the tyre major is likely to rope in some new agencies.

Currently, the MRF account is mainly handled by Lowe, which created the iconic MRF muscle man, and Rediffusion. Ad agency Lowe has been associated with the company for over 15 years.

It is reliably learnt from advertising circles that JWT is the front-runner in the race for a slice of the mega ad pie. Sources in MRF said, “Presentations are being made by different agencies and nothing has been finalised.”

Apparently, JWT approached the tyre company with an offer of a presentation when it learnt that the client was looking out for new faces. However, MRF executive director Philip Eapen told ET: “We are very happy with our agencies. We have not decided yet. We are currently looking at various agencies.”

“We felt some of our new lines of businesses required more focus. Therefore, we want to engage another agency to bring in that additional attention,” he added.

Bad weather in south east Asia can impact your car tyre prices. There is a weather pattern called El Nino. It is created by the abnormal warming of waters in the Pacific Ocean around the equator.

This usually results in drought in Australia, Indonesia and Philippines, along with flooding in the Americas. Thailand, Indonesia, Malaysia account for more than 70% of the world’s natural rubber output. Rubber is mainly used in producing automobile tyres. So, if rubber trees there are impacted by warm weather, it immediately reduces the availability of natural rubber.

Reduced availability and no change in demand increases the price of natural rubber in the world market. Already, the price of natural rubber has increased more than 300% since 2001. The main substitute of natural rubber is synthetic rubber, which is produced from crude oil.

It is used especially in radial tyres. The International Rubber Study Group (IRSG) expects global consumption of natural and synthetic rubber to rise by 3% in 2007. However, as crude oil prices have been at record levels, that has translated into higher synthetic rubber prices.

There is also little likelihood of synthetic rubber companies increasing availability because of volatile crude oil prices. In other words, with raw material prices high, demand high and no substantial increase in supplies likely, synthetic rubber prices are also going to spiral.

India’s rubber production is expected to increase in 2007. But with the economy growing at 9%, it will be consumed locally. India being a tropical country has certain limitations in terms of how much of synthetic rubber can be used. Secondly, there is an inbuilt check and balance between natural and synthetic rubber prices.

Once every company switches to synthetic rubber, it reduces the demand for natural rubber, which comes down in terms of price. Should that worry you as a consumer? With synthetic and natural rubber both expensive, tyre manufacturers may have little option but to hike retail prices. High rubber prices impact tyre makers.

at the development. Sources said such long-term relationships undergo change, citing the case of TI Cycles of the Murugappa group. The latter had snapped its 14-year-old relationship with ad agencies O&M and Mudra.

MRF, which has power brands, is strong in aftermarket sales. Over the last 16 years, MRF has outgrown its image of being a corporate mascot to a “symbol of strength, reliability and durability”.