Apollo to invest Rs 300 crore in Kerala unit in next two years
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Apollo Tyres will invest Rs 300 crore in its Kalamassery unit in Kerala in the next two years and make it an export unit for industrial tyres, a top official has said.
"We have intentions to see how we can grow further. We are in the process of identifying greenfield projects in Eastern Europe. We are also looking at opportunities that come our way," company chairman Onkar S. Kanwar told reporters here on Wednesday night on the eve of its AGM.
In the last six years, the tyre maker has acquired two companies in South Africa and Europe. The Kalamassery unit, near here, will manufacture industrial tyres for export to Europe, South America and North America, he said.
"We have intentions to build it truly as industrial tyre unit. We intend to invest in the next two years about Rs 300 crore."
The firm would introduce premium Dutch brand of tyres, Vredestein, later this year. Apollo had acquired Dutch tyre maker Vredestein Banden B.V. in May, 2009.
The company, which has recorded an annual turnover of USD 2.5 billion during 2011-12, clocking a 37 per cent growth year-on-year, was eyeing a turnover of USD 3 billion in 2012-13 fiscal, Onkar said.
The firm would invest close to Rs 150 crore in its units in the country this year, company's Managing Director Neeraj Kanwar said. On some trade unions mulling introduction of 72 hour strike in Kerala, Kanwar said this would be 'detrimental'.
"Look at the neighbouring states like Tamil Nadu. We need more employments. Several units have closed down in the past years in Kerala. Such strikes will only harm the state," he said.
In revenue break up terms, India contributes 67 per cent, Europe 23 per cent and South Africa 10 per cent, with the Replacement market bringing in 73 per cent of revenues and Original Equipment Manufacturers 27 per cent.
Despite tough market conditions, where there has been flat growth in both commercial vehicles and passenger cars, net sales for Apollo had grown quarter-to-quarter and this was due to its focus on replacement market and exports, Satish Sharma, Chief India Operations, said.
On the market outlook, Kanwar said "We are optimistic. Last year Apollo has grown over 30 per cent. This year the company is seeing a positive trend. We are very bullish and aggressive. The growth story has just begun."
On the Kerala government's recent decision to hike power tariff for domestic and commercial subscribers, he said last year the company had spent Rs 25 crore to shift from furnace oil to coal in its Perambra unit which has given one third reduction in energy costs.
"We are also exploring whether we can use gas in Kalamassery unit," he said.
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