Tyre maker Apollo Tyres is set to expand its operations through a greenfield project in Tamil Nadu at a cost of Rs 500 crore (Rs 5 billion).
With 100 tonne per day capacity, the new facility will produce radials for trucks, buses and passenger cars. The company is in the final stage of acquiring the land for the project and has already signed a memorandum of understanding with the Tamil Nadu government.
The expansion forms part of a two-phase programme, incurring Rs 300 crore (Rs 3 billion) in the first phase and the remaining sum in the second phase.
Neeraj Kanwar, joint managing director and COO, Apollo Tyres, said, "We are setting up a plant in Tamil Nadu with a combined capacity of 100 tonne per day. For this, the company has initialised a capex of Rs 500 crore which would be spent in six years."
The company has launched V-speed rated (safe up to 250 km/hour) Acelere Sports range tubeless car radials. The tyres will be priced 15 per cent to 20 per cent higher than other radials in the market. "The Acelere Sports is a high-end, technologically superior tyre, catering to the new generation of automobiles on Indian roads," added Kanwar.
The new plant in Tamil Nadu will be the company's fourth radial manufacturing plant in India and globally seventh. It has two plants in South Africa and one in Zimbabwe where the company sells its radials under the Dunlop brand.
The company also has a tube making plant in Pune. Apollo's combined domestic capacity stands at 850-900 tonne per day with the South African plant producing 210 tonne a day. The overall capacity of all the plants stands at 3,14,000 tonne a year.
ATL's production of automobile tyres grew by 18 per cent to 7 million units in FY06. Tyres accounted for 90 per cent of ATL's turnover in FY06 while tubes and flaps and alloys accounted for the rest.
The company also aims at increasing production to 10,000 passenger car radials tyres from about 6,500 tyres per day at present where it holds a market share of 15 per cent.
The production capacity of the light truck radials, where Apollo has 24 per cent market share, will be increased to 50,000 units per month at its Baroda facility.
Further expansions are proposed at the Baroda and Kochi plants to hike production capacity of 360 million tonne per day and 270 million tonne per day, respectively. The company's total investment for this proposed expansion will be Rs 160 crore.
