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Apollo to build $685M plant in Europe

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GURGAON, India (May 15, 2014) — Apollo Tyres Ltd.’s board of directors has approved an investment of $685 million over four years to build a car and truck tire plant in eastern Europe, but the Indian tire maker has yet to select a site.

The board said it envisions a plant with capacity for 16,000 passenger and 3,000 truck tires a day.

Addressing the issue in the firm’s fiscal 2014 earnings results, Apollo Chairman Onkar S. Kanwar said, “We are aggressively pursuing organic growth opportunities. Considering the increased demand for our tires in Europe, along with capacity constraints in our existing facility in Enschede, the Netherlands, has made us prioritize our investment into a greenfield facility in the region.”

(Apollo Tyres Ltd. photo)
Apollo Chairman Onkar S. Kanwar

Mr. Kanwar said the project would be funded with accruals and debt at its European subsidiary.

Apollo studied a similar investment in eastern Europe several years ago and held discussions with Cooper Tire & Rubber Co. prior to a now-defunct proposed merger about a possible joint manufacturing venture in eastern Europe.

Cooper eventually went its own way on that, acquiring the former Trayal plant in Krusevac, Serbia, in 2012.

 

Europe represents nearly 30 percent of Apollo’s global sales, according to the firm’s recently released fiscal 2014 results. That amounted to $685 million last year.

Apollo moved into Europe seriously in 2009 with its acquisition of Vredestein Banden N.V.

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TB Reader Poll

Previous | Published January 28, 2016

Titan International and the United Steelworkers union have petitioned the U.S. International Trade Commission and U.S. Department of Commerce seeking relief from OTR tire imports from China, India and Sri Lanka. What’s your opinion?

I wholeheartedly support their action – something needs to be done.
46%
(36 votes)
I think it’s a bad idea that could inevitably tie the hands of domestic tire makers.
13%
(10 votes)
I oppose any duties against tire importers—they only raise costs for distributors and make it harder to obtain inventory.
24%
(19 votes)
I’m kind of on the fence and not sure what’s right, but need more information before deciding.
14%
(11 votes)
I don’t really care whether or not relief is granted.
3%
(2 votes)
Total votes: 78