Onkar S Kanwar (third left), Chairman, Apollo tyres, and senior management team addressing media after inauguration of the company's global R&D Centre in Chennai
Apollo Tyres is planning to set-up a new manufacturing facility in Andhra Pradesh to manufacture tyres for two-wheeler and pick-up vehicles. The company plans to invest around Rs 500 crore in the new facility.
Speaking to reporters after inaugurating company's new research and development (R&D) facility at Chennai, which is built at a cost of around Rs 90 crore, Neeraj Kanwar, Vice-Chairman and Managing Director, Apollo Tyres said that the company will manufacture tyres for two-wheelers and pick-up vehicles in new facility, which is currently being manufactured by some third-party on behalf of Apollo tyres.
Currently, the company is selling around 2,00,000 two-wheeler tyres a month and by end of this year Kanwar said it will be increased to 2,50,000 tyres a day.
Also, Apollo Tyres has a huge facility at Oragadam, near Chennai. The facility is currently manufacturing car and bus radial tyres.
The new plant will be for future, said Kanwar.
While Kanwar declined to comment on the investment, sources in the Andhra Pradesh Government said that the company plans to invest around Rs 500 crore and plans to set up the facility at Chitoor district, which is on the borders of Andhra Pradesh and Tamil Nadu.
Satish Sharma, president - Asia Pacific, Middle East and Africa said that Apollo Tyres total passenger car capacity across its plants is around 32,000 a day and is adding 3,000 tyres in Baroda. The company is also investing around Rs 2,700 crore to expand truck bus radial capacity to 12,000 from 6,000.
The company has already invested around Rs 2,100 crore in Chennai, which also serves export markets, taking the total investment to around Rs 4,800 crore.
Company's Hungary plant will be operational by early 2017. Capacity of the plant is around 5.5 million passenger cars tyres, 6,750,000 tyres TBR. The company has a facility in Netherland which manufactures around seven million tyres, mainly passenger cars.
Apollo Tyres has posted a net profit of Rs 204.61 crore for the quarter ended September 30, 2016 as compared to Rs 215.18 crore for the quarter ended September 30, 2015. Total income has decreased from Rs 2530.76 crore for the quarter ended September 30, 2015 to Rs 2345.67 crore for the quarter ended September 30, 2016.
Kanwar said, commercial vehicle industry demand has picked up in October and November, after seeing a dip in second quarter, so the third and fourth quarters are looking good.
Sharma added better improvement in mining, better infrastructure, disposable income, 7th pay commission will add to increase in demand in future.