Apollo Tyres to up capacity by 50%

Apollo Tyres today said it would increase production capacity in the country by over 50 per cent as it looked to enter the top-10 global tyre makers’ club in the next five years.

In line with its plans, the company is also looking to almost double its exports in the next year.

“Our aim over next five years is to reach among the top 10 tyre companies in the world....Our production capacity will go up by over 50 per cent to around 1,600 tonnes a day after the Chennai plant reaches terminal capacity by first quarter of next year,” Apollo Tyres Managing Director Neeraj R S Kanwar told reporters here.

The company has a total production capacity of 950-1,000 tonne a day in its three plants in Gujarat and Kerala and is also undertaking minor expansion at other plants in the country, he added.

Kanwar said the Rs 2,000- crore Chennai plant would go on stream from the beginning of next month. It will have an installed capacity of 400 tonnes a day, which will translate into 14,000 units of radial tyres, including 8,000 units of passenger car and 6,000 units of truck and bus radials.

Apollo Tyres is also looking at increasing its supply of car radials to original equipment manufacturers (OEMs). It plans to supply 50 per cent of the upcoming Chennai plant’s output to OEMs and the rest in the after-market, he said.

Kanwar said Apollo Tyres was also firming up plans to nearly double its exports by next year.

“Currently exports constitute 10-12 per cent of our Indian production. Our aim is to increase the share to 20 per cent by next fiscal.”

He added that the company would start export of the Apollo brand of tyres to Europe from next year with the ‘Hawkz’ range in April.

Besides, the tyre maker is also planning to begin imports from its Netherlands-based subsidiary, Vredestein Bandan, from the first quarter of 2010-11.

“Vredestein mostly caters to a niche market for tyres above 15 inches in the sports utility vehicles segment. We are going to start its Indian sales in a small way,” Kanwar said.

Apollo Tyres acquired the Dutch company that has a plant with an annual production capacity of 5.5 million units, in May this year.

Kanwar said Apollo Tyres has also tied up with German car maker Volkswagen to supply tyres for the upcoming small car Polo, to be launched in India early next year.

Asked about the impact of rising commodity prices and likelihood of price increase by the company, he said: “Price of natural rubber is increasing steadily and we are studying the market...Price hike will happen, maybe by end of the fiscal.”