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India’s prominent tyre brand, Apollo Tyres, is planning to invest about INR 500 crore in its new manufacturing unit. The facility to be established in Andhra Pradesh will be responsible for manufacturing tyres for two-wheelers and pick up vehicles.
Company’s Vice-Chairman and Managing Director, Mr. Neeraj Kanwar was in Chennai for the inauguration of Apollo Tyres new Research and Development (R&D) facility, which has attracted an investment of nearly INR 90 crore. According to him, in this new facility, the company will produce tyres for two-wheelers and pick up vehicles. The manufacturing of these tyres is presently outsourced to a third party manufacturer on behalf of Apollo Tyres.
The company currently sells around 2,00,000 two-wheeler tyres each month and as per Mr. Neeraj Kanwar by the end of 2016, it will be raised to 2,50,000 tyres each month. Moreover, the new manufacturing unit will be for future, he added. Apollo Tyres owns a widespread car and bus radial tyres manufacturing plant at Oragadam, situated near Chennai.
Though Mr. Neeraj Kanwar turned down to comment on the investment part, however, sources belonging to Andhra Pradesh Government maintained that Apollo Tyres has an investment of INR 500 crore in the pipeline and plans to introduce the manufacturing plant in Chitoor district, located on the borders of the southern states of Andhra Pradesh and Tamil Nadu.
Gurugram headquartered tyre brand has a total passenger car tyre capacity of nearly 32,000 per day across its plants and is adding 3,000 tyres in Baroda, Mr. Satish Sharma, President – Asia Pacific, Middle East and Africa stated. Besides this, the company is also investing around INR 2,700 crore to increase the truck and bus radial (TBR) capacity from the ongoing 6,000 units to 12,000 units. Meanwhile, Apollo Tyres has already invested about INR 2,100 crore in its Chennai facility. This manufacturing unit serves the domestic market as well as the export markets, which boils down to a total investment of nearly INR 4,800 crore.
Apollo’s overseas Hungary plant will be ready by early next year i.e. 2017. The capacity of this abroad plant is around 5.5 million passenger cars tyres and 6,750,000 tyres TBR. In addition, company’s facility situated in Netherlands produces about seven million tyres, which majorly consists of passenger cars.
The September quarter saw Apollo Tyres register a net profit of INR 204.61 crore against the net profit of INR 215.18 crore recorded in the same period last year. Here, the overall income has reduced from INR 2530.76 crore for the quarter ended September 30, 2015 to INR 2345.67 crore for the quarter that has ended on September 30, 2016.
According to Mr. Satish Sharma, the revival in the sectors such as mining and infrastructure alongside the implementation of 7th pay commission will definitely raise the demand bar in coming days. While Mr. Neeraj Kanwar added that after witnessing a drop in the second quarter, the CV (Commercial Vehicle) industry demand has accelerated in the months of October and November, as a result the third and fourth quarters look positive.
