Apollo Tyres plans to invest around €400 million (over Rs 2,500 crore) to set up two new facilities in East Europe and Brazil in the next 3-4 years as it aims to expand its global footprint.
The company, which currently has an European subsidiary — Apollo Vredestein, is also keeping its options open to acquire a tyre firm in the Latin American market to start its operations there.
“We will set up a greenfield plant in Eastern Europe and currently we are scouting for locations in 4-5 countries. The plant will be ready in the next 2-3 years,” the Apollo Tyres Chairman, Mr Onkar S. Kanwar, told PTI at the ongoing Geneva Motor Show here.
The company is looking to start the plant with passenger car radial tyres with an initial capacity of 7-10 million units per year, he added.
“We have not finalised the location and capacity yet, but any such facility will require an investment of at least €150-200 million,” he said.
Earlier in 2008, Apollo Tyres had planned to set up a plant in Hungary with an investment of €200 million and having a capacity of 25,000 units a month. However, the company had to abort its plans due to local political issues there.
Talking about the plan for Latin America, Mr Kanwar said the company is studying the market to start operations there.
“We have set up a small office in Brazil and currently we are testing our tyres. We are looking to set up a plant and hope to start construction in the next two years,” he said, adding it will start with commercial vehicle tyres there.
The proposed facility will have an initial capacity of 7-10 million units a year, he added.
“We are looking at various options for the Latin American market. We exploring possibilities for a joint venture or any kind of tie-up with a local player,” Mr Kanwar said.
Asked if the Indian firm will acquire a Brazilian firm or plant, he said: “We never rule out an acquisition. We are looking at all options.”
Talking about the size of investment in Brazil, Mr Kanwar said it will be in similar range of what has been planned for the East Europe facility and the company would fund the entire investment through internal accruals and debt.
Apollo Tyres recently tied up with an European testing firm Evonik. The Indian firm tests its products at Evonik’s centres for environment friendly parameters.
The Indian entity also introduced a new brand — Aspire 4G — for the European market at the ongoing motor show here.
Mr Kanwar said the company is targeting a revenue of $ 6 billion in the next five years from the current about $2 billion.