The Hindu Business Line : Apollo Tyres’ plant near Chennai to be ready by 2009-end

Apollo Tyres Ltd (ATL)’s new greenfield radial tyre plant at Oragadam Industrial Park on the outskirts of Chennai will become operational by late next year.

A senior company source told Business Line that civil construction for the major plant in the first phase of the Rs 2,200-crore project at a cost of Rs 1,000 crore will commence in two months. Development of 135 acres for the plant has already been completed, he said.

The plant, with a daily capacity of 200 tonnes using the latest technology modified by the company, will manufacture radial tyres to suit Indian roads and Indian loading pattern, the ATL official said.

The company, he said, already has four manufacturing units in India and four in southern Africa. Apart from the Oragadam greenfield facility, construction of another plant is currently under way in Gyongyos, Hungary.

He said that this unit in Hungary would be a “dedicated passenger car radial tyre plant with a capacity of 7 million tyres a year in the first phase”. The official added: “Phase 1 of the project is expected to be completed in 18 months with a projected investment of €200 million.”

ATL, he said, has become a high-performance company and the leading Indian tyre manufacturer with revenues of over $1.2 billion. “It is built around the core principles of creating stakeholder value through reliability in its products and dependability in its relationships.”

The company has a network of over 4,000 dealerships in India, of which over 2,500 are exclusive outlets. In South Africa, it has over 900 dealerships, of which 190 are Dunlop Zones, he said.

‘Domestic market crucial’

The domestic market is crucial for the company and hence it has embarked upon product and capacity expansion projects in the country involving huge investments, he said.

There is a major threat from cheaper Chinese imports into India. Added to this, the official said, between June 2007 and July 2008, natural rubber prices have gone up by 61 per cent, while crude prices are up 111 per cent. Crude-based derivatives like rubber chemicals are costlier by 60 per cent, while an item like poly-butadiene rubber is currently facing a production crisis, despite a price increase of 115 per cent, he added.

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Apollo Tyres’ Chennai unit to go on stream mid-2009
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