Apollo Tyres has been aggressively expanding its global footprint for quite some time now. The company recently made headlines when production began at its first greenfield facility outside India. The Dollar Business caught up with the man behind this internationalisation strategy, Neeraj Kanwar, Vice Chairman & Managing Director of Apollo Tyres Ltd., to understand the company’s international market gameplan.
TDB: Apollo Tyres has been increasingly focussing on international growth. Where did the journey start?
Neeraj Kanwar (NK): In 2006, Apollo Tyres became the first Indian tyre major to successfully conclude an international acquisition – Dunlop Tyres International, South Africa. This was followed by the acquisition of Vredestein Banden BV, Netherlands, in 2009. The company was also the first to start selling India-made tyres in the European market, which is considered to be the most advanced automotive market. The inauguration of the greenfield facility in Hungary was again a first for an Indian tyre company. With our significant investments in R&D, manufacturing and brand-building activities, we are now poised to be a major force in key international markets.
TDB: Why did you choose Hungary as the location for your new plant. What are your revenue expectations?
NK: Hungary was chosen over some of the neighbouring central and east European countries after considering various factors. The factors that we considered before shortlisting and finalising the location are the ease of doing business, manufacturing costs, availability of the skilled manpower, government policies, logistics cost, proximity to highways and a variety of softer factors. We have just inaugurated the facility in Hungary and it would be too early to comment on the revenue contribution of that facility. We are hoping that in a couple of years, when the plant reaches its phase 1 terminal capacity, the revenue distribution ratio would be 45% from offshore facilities and 55% from India.
TDB: Was derisking the Indian business a major factor behind this aggressive internationalisation strategy?
This story is from the August 2017 edition of The Dollar Business.
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This story is from the August 2017 edition of The Dollar Business.
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