Business Standard

Apollo to make Chennai its R&D hub at Rs 2,000 cr

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is all set to make Chennai its hub for both manufacturing and research and development (R&D). The country’s leading tyre manufacturer is setting up a Rs 2,000-crore manufacturing facility, in which, it says, another Rs 600 crore is likely to be pumped in.

“Over the next three years, the Chennai plant, which will commence production next month, will contribute Rs 3,500 crore to Apollo Tyres’ revenues,” Satish Sharma, chief — India operations, Apollo Tyres told Business Standard. He added that last year’s revenues were Rs 4,000 crore, expected to increase to Rs 5,000 crore in the next financial year. “Three plants — one in Gujarat and two in Kerala — contributed to the revenues.”

The Chennai facility’s daily production capacity will be 8,000 passenger car radials and 6,000 truck and bus radials. “Initial investment will be around Rs 2,000 crore,” said Sharma.

He added the plant will reach full capacity for car radials in 6-7 months, after which the company is likely to increase production in a phased manner. “The plant is designed to manufacture 20,000 car radials a day. To increase to this capacity, will require another Rs 500-600 crore.”

“All our plants across the country will reach full capacity utilisation in one year,” said Sharma. Currently, the company’s installed capacity for commercial vehicle radial is 1.8 lakh and 8 lakh for car radials a month. After which we will look at expansion,” he added.

“Our current share in the after-market segment is 30-33 per cent in truck and bus radials, which will be increased to 50 per cent.” The current market size for bus and radials is around one million a month.

Apollo at the wheels

Apollo Tyres will start supplying trained drivers to meet the supply-demand mis-match in the country. Sharma said: “We have a tremendous scope in this business. The industry is yet to tap the opportunity. It is (supply trained drivers) a good revenue generating opportunity for the company.” He added that the company is yet to take a final call on the launch of the new initiative and a partner.

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