Apollo Can Grow More In Europe

As part of a bid to expand global presence, the Indian tyre giant, Apollo Tyres Ltd., is currently concentrating more and more on Europe as well as other geographies. At present, Apollo is fast moving ahead with the construction of a Greenfield facility in Hungary which would be rolling out tyres within 2 months. In an exclusive interview to Rubber Asia at a time when the formal inauguration of the new Greenfield facility is scheduled for early April 2017, Apollo Vice Chairman & MD Neeraj Kanwar shares some of the key facts about the upcoming company such as the multiple factors for choosing Hungary to set up the facility, the initial investment, the most advanced machinery and updated manufacturing technology of the plant and its other unique features. He also explains Apollo’s efforts towards enhancing its global marketing operations and its latest R&D activities across the world. According to Neeraj, while Apollo is confident of further growth in Europe, the company will invest upwards of Rs 35,000 million in India towards adding capacity and setting up a new manufacturing unit. Excerpts:

- TN Kalaimani

What is the present state of the construction of Apollo’s new facility in Hungary? When is it expected to start operation?

The construction of our Greenfield facility in Hungary is moving ahead in full steam. We would be rolling out tyres from this facility within 2 months, and a formal inauguration of this unit is scheduled for early April 2017.

How much is the total investment planned?

We are looking at investing Euro 475 million in this facility in Phase 1, which should be completed by 2019.

Why has Apollo chosen Hungary to set up the new facility?

Hungary was chosen after a consideration of various factors over some of the neighbouring Central Eastern European countries. There are multiple factors that we consider before shortlisting and finalizing the location for a Greenfield. A few of these include: manufacturing costs, availability of skilled manpower, government policies, including incentive for manufacturing, logistics cost, proximity to highways and a variety of softer factors.

Please explain what support you are getting from the Hungarian Government?

The Hungarian Government is offering a regional investment aid of approximately Euro 100 million for our Greenfield facility as permitted under the EU norms. This is towards the development of the Gyongyoshalasz region, where our plant is located and towards providing direct and indirect employment to hundreds of people.

Please explain how advanced the facility would be on completion. What about the machinery and equipment?

This would be Apollo Tyres’ most advanced manufacturing facility across geographies. The Team has used their learnings and experiences in procuring the most updated manufacturing technology for our Hungary plant.