GURGAON, IndiaApollo 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.
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.