Apollo Tyres is to ramp up investments in Europe and South Africa.
Speaking today as the company unveiled its first quarter results, chairman Onkar Kanwar said the company would be investing EUR6.6m (US$8.6m) in its Enschede manufacturing unit in the Netherlands to increase the plant’s capacity from the current 5.1m to 6m tyres a year.
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Similarly, South Africa will benefit from US$30m for expansion and an equipment upgrade in the Durban and Ladysmith plants.
The Chennai Greenfield in India, which began production last quarter, is expected to be completed by the end of the year. The Board has already sanctioned a further Rs3bn investment, the company said.
The news came as Apollo reported revenue for the 1st quarter up 11% to reach a net sales of Rs18.2bn.
Kanwar said: “This quarter’s results reflect the pressures on the bottomline due to an abnormal rise in the price of natural rubber. In April 2009, it was Rs 70/kg. When we closed the year in March 2010, it had doubled to Rs 145/kg.
“Four months later in July, the average price is Rs 180/kg – and rising. I do not see relief in the immediate future since while international prices have been falling since April, domestic prices have continued to rise.”
Operating profits reached Rs2.02bn, up from Rs2.07bn in the same period last year. Net profit was Rs742m, from Rs738.2m last year.
