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Pratim Ranjan Bose

Capacity may be stretched by another 20 t by raising productivity

Kolkata June 14 Apollo Tyres is planning a major capacity expansion of Dunlop South Africa facility. The project may be taken up for implementation in 2008-09.

Apollo had acquired Dunlop Tyres International (Proprietary) Ltd, South Africa (DTIPL) along with its subsidiaries in Zimbabwe and the UK in April 2006 through an all-cash deal worth Rs 290 crore.

Mr S. Sarkar, Chief of Corporate Strategy and Marketing of Apollo Tyres, told Business Line that Apollo has already ramped up the production of the South African facility from 150 tonnes to 170 tonnes a day through various de-bottlenecking exercises.

The capacity may be further stretched by another 20 tonnes in this fiscal by increasing the productivity.

"We are currently stretching the capacity of the South African facility by improving the productivity without any additional investment in plant and machinery. The process will be completed in this fiscal following which we may invest in capacity augmentation," Mr Sarkar said. "The project may be taken up in the next fiscal," he added.

Dunlop SA produces primarily radial tyres including truck-bus radials. Roughly 15 per cent of the capacity is used in manufacturing heavy-duty off-the-road (OTR) tyres for the mining sector. The products are marketed in Europe, Australia and South Africa.

With the detailed capacity augmentation plan, the company may ramp up both radial and OTR tyre manufacturing capacities substantially. "The detailed project plan and cost estimates are yet to be worked out," Mr Sarkar said.

Apollo, however, is not considering any capacity augmentation of its 30-tonne Zimbabwe facility.

"The Zimbabwe plant is heavily dependent on imports. We may consider expanding the capacity once the availability of foreign currency improves in the country," he said. Dunlop Zimbabwe is the only tyre facility in the country. The shares of Apollo Tyre closed 1.78 per cent lower at Rs 322.30 on BSE on Thursday.

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