Apollo to expand Chennai facility

Company hopes demand for radical tyres will increase

Apollo Tyres is planning to expand its Chennai plant capacity, and is in the process of setting up an R&D centre in the same complex. The new centre will take up research and development of commercial vehicles for Apollo’s manufacturing plants worldwide. Speaking to Analysts recently, Gaurav Kumar, group head, corporate strategy and finance, said the company was firming up the project for its India operations.

“We have sufficient existing capacities to cater to  the demand in the Indian market. However, in the medium- term, we would be looking to expand the Chennai plant to meet the demand growth,” said Kumar.

The Chennai plant has a daily capacity to manufacture 6,000 radial tyres for trucks and 15,000 for passenger cars.  

While the plant caters to both domestic and export markets, the capacity utilisation has been at 70-75 per cent.

While Kumar declined to give any specifics on the expansion, and an email sent to the spokesperson was not responded to, sources said depending on the demand, the plant’s capacity could be expanded 50 per cent.

Apollo expects that in a few years’ time, it needs higher capacity for truck radials for India and other export markets. The Chennnai plant expansion is also necessary due to the conversion of Kalamassery plant, in Kerala,  for the specialty tyres in the company’s current product mix of truck and agricultural segments.

On the capital expenditure outlook for 2014-15, Kumar said, while it would not be very high this fiscal, there would be a certain amount of capex addition in 2015-2016, which would be funded out of the Indian operations. Apollo’s overall maintenance capex is about Rs 200 crore and expects this to continue.

“In 2015-16, if things go as per the plan, we could be looking at a capital spend of euro 200 million on greenfield expansion, “ he said.

However, on India, the project plans are yet to be finalised," said Kumar.