GURGAON, India (Feb. 12, 2015) — Apollo Tyres Ltd. has closed its Durban, South Africa, truck and OTR tire plant, citing the factory's “uncompetitive cost structure” and continuous labor unrest and related issues.
Apollo closed the plant, which it had acquired in 2006 in its purchase of Dunlop South Africa, last November as part of a “rescue plan” the Indian tire maker had proposed last September.
The closing affected 600 workers; Apollo said it budgeted about $13 million to cover costs associated with the closing.
In comments issued along with the firm's third quarter earnings report, Apollo said it had to “secure the best value for all our stakeholders” in its decision to close the plant.
The tire maker said it will continue its trading activities in Africa, selling both Apollo- and Vredestein-branded tires throughout the continent.
Apollo's African business runs primarily through Apollo Tyres South Africa Pty. Ltd., headquartered in Durban. The company also has subsidiary companies in Zimbabwe and United Arab Emirates.
The company reported $69.5 million in sales in Africa for the nine months ended Dec. 31, down 62 percent from the year before, which represented the firm's revenue there before it sold the bulk of its African business to Sumitomo Rubber Industries Ltd.
That deal, for $62 million, included Apollo's Ladysmith, South Africa, car and light truck tire factory and the rights to the Dunlop brand name for Africa.
