The Rs 12,000-crore Apollo Tyres is looking forward to set up production base in Asean (Association of South East Asian Nations) countries to take advantage of the free trade regime.

As a precursor to its “long-term” move, the company has already started exporting ‘Apollo' branded tyres from India and is on course to set up sales offices in Thailand and Indonesia this year. To add to the market presence, Apollo will soon launch its Europe-made ultra-high performance ‘Vredestein' tyres in both the countries.

“We would like to set up a production base in Asean. But that is a very long term plan. We will now start feeding the market for three to four years so as to create a demand for Apollo products in South-East Asia,” the Vice-Chairman and Managing Director, Mr Neeraj Kanwar, told Business Line .

Though the company's Baroda and Chennai facilities are capable of manufacturing the Vredestein tyres, Apollo prefers to market the European product in Asean in the hope of extracting higher premium. “Vredestein will be rolled out in Indonesia and Thailand very soon,” Mr Kanwar said.

Europe profit churner

While anticipating its Indian operations – contributing nearly two-third of the revenue – to do better in 2012-13, the company is laying faith on the European operations to remain more profitable. “The revenue growth will come from India. But, Europe will be leading in terms of profitability,” he said.

Though volatility in natural rubber prices expected to be les volatile when compared to last year, the profitability of Indian operations may be under pressure due to slide of rupee against dollar.

South Africa break-even

Mr Kanwar is hopeful that the South African operation — which is facing intense competition in the domestic market from Chinese imports — “should break even this fiscal,” riding on exports to other African nations and Latin America. Apollo Tyres SA ended up losing nearly Rs 43 crore in 2011-12.

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