KOBE, Japan (Dec. 2, 2013) — Sumitomo Rubber Industries Ltd. has completed its acquisition of Apollo Tyres South Africa Ltd., including the rights to produce and sell Dunlop-brand tires in 30 African countries and two countries in the Indian Ocean region.
Sumitomo paid $60 million to India's Apollo Tyres Ltd. for the assets, which also include the South African firm's distribution and sales network, the head office and sales/distribution teams, and the Ladysmith, South Africa, plant, with a daily output of 9,600 automobile and light truck tires.
Apollo retains a truck/bus and OTR tire plant in Durban, South Africa, and will continue to be active in the region with its Apollo, Vredestein and Regal brands.
The firms also agreed to produce each others' respective brands under contract manufacturing terms so as to have locally made products available for the market, Apollo said.
The firms disclosed the pending deal in May.
The companies did not disclose the acquired unit's annual sales, but Apollo said the South African business accounted for 12 percent of its fiscal 2012-13 sales, or roughly $280 million.
SRI will rename the Durban-based company Sumitomo Rubber South Africa (Pty) Ltd. It starts operations with approximately 1,100 employees.
The company said it plans to boost capacity at the plant to 12,000 units daily by 2016, although it did not disclose what investments it is planning to accomplish this.
This acquisition "greatly increases the scale" of SRI's tire business in Africa and thereby accelerates the pace of its global expansion and development, the Kobe-based manufacturer said.
From Apollo's perspective, this transaction is another step on a "very eventful journey" for the company in Africa, said Apollo Chairman Onkar Kanwar, referring to his company's acquisition of Dunlop Tires International in 2006.
Apollo's business dealings in Africa since 2006 have "given us a very sound understanding of the growing African market and helped us develop the market for our products in Latin America as well," Mr. Kanwar said.
"Using South Africa as the base, we will now focus on brands where we own global rights, which we have already been selling in South Africa for the past few years, for the African and Latin American markets."
Apollo is renaming its venture in South Africa Apollo Durban (Pty) Ltd.
The Indian firm stressed that no jobs were lost in this tran