Indian tyre maker Apollo Tyres is investing US$685 million over four years to build a car and truck tyre plant in Eastern Europe. It will be its second as the firm also operates a facility in Netherlands. Apollo has not identified the location for the new plant that is expected to have a capacity for 16,000 passenger and 3,000 truck tyres a day.
This announcement was made in conjunction with its fiscal 2014 results for the period ending March 31, 2014. Apollo’s net sales increased slightly to about US$2.24 billion, while net income also increased to about US$169 million, up from about US$103.2 million. Europe accounts for around 30% of Apollo’s global sales, hence its interest in pursuing growth in Europe.
“We are aggressively pursuing organic growth opportunities,” said Apollo Chairman Onkar S. Kanwar. “Considering the increased demand for our tyres in Europe, along with capacity constraints in our existing facility in Enschede, the Netherlands, has made us prioritise our investment into a greenfield facility in the region.”
Apollo studied a similar investment in Eastern Europe several years ago and held discussions with Cooper Tire & Rubber Co. prior to the now defunct proposed merger about a possible joint manufacturing venture in Eastern Europe. Cooper eventually acquired the former Trayal plant in Krusevac, Serbia, in 2012.
Apollo acquired Vredestein Banden N.V. in 2009.