Tyre major Apollo Tyres is investing over Rs 100 crore in brownfield expansion at its existing facility at Vadodara in Gujarat. "The new facility will be meeting the growing demand for truck and bus tyres," Apollo Tyres vice-chairman & managing director Onkar S Kanwar told Business Standard.
The project is expected to be completed by the next year. According to Kanwar, the means for financing the expansion has not yet been finalised, though he did say that it could include some equity infusion.
It is worth noting that last year Apollo Tyres had drawn up plans for setting up a fully-owned subsidiary to implement a greenfield tyre project at an estimated cost of Rs 450 crore. The capacity of the plant was be 100 tonne per day.
It was to be a hybrid plant capable of making radials as well as cross ply tyres for trucks and buses to meet the emerging demand in this segment. "Keeping in mind the changing scenario in the market, we have decided to go for modular growth right now," Kanwar said.
Kanwar also disclosed that Apollo Tyres has gained significant marketshare in the commercial tyre segment during 2001, though some of it came from the fact that the Modi Rubber plant at Modipuram was shut for a large part of the year. "Our current marketshare in the commercial tyres segment is 23-24 per cent which is 2-3 per cent higher than an year ago," he added.
On the issue of offering equity stake to Continental AG of Germany, Kanwar said that the issue is still open in spite of a change at the top at the German company. Continental has a nominee on the Apollo Tyres board.
Kanwar hopes to end the financial year 2001-02 with a turnover of Rs 1,700 crore compared with a turnover of Rs 1,454.70 crore recorded in the previous year. For the nine month period ending December 31, 2001, the company reported a turnover of Rs 1,237 crore against Rs 1,047 crore for the corresponding period of the previous year. According to Kanwar, the revenue growth has come from better sales volumes clocked by the company.