ERJ staff report (TP)
Gurgaon, India – The Board of Directors of Apollo Tyres Ltd said on 2 July it approved an expansion of truck-bus radial capacity at the Chennai plant from the present 6,000 tires per day to 8,900 tires per day.
The Board noted the improved demand outlook and the fact that the current Chennai project is generating returns ahead of projections. The Board also approved a further conversion of the company’s Kalamassery plant, in the rubber producing southern Indian state of Kerala, from bias truck tires to specialty/industrial tires.
The company estimates a capex of $340 million (€249m) for these projects.
Apollo said it plans to raise funds to pursue these organic growth opportunities and for other corporate purposes. The Board also authorised the company to raise funds, subject to approval from shareholders, through issue of securities to the extent of $200 million.
The management has also taken an approval to increase the limit of investments by FIIs (Foreign Institutional Investors) from 40% to 45% in the equity share capital of the company.
Update from Rubber News (18 July):
The board of directors of Apollo Tyres announced it will also convert a bias-ply truck tire plant in Kalamassery, southwest India, to specialty/industrial tires.
The firm does not project an employment increase at the plant in conjunction with the conversion.
The conversion of the Kalamassery plant will occur over the next three to four years, Apollo said, and is due to the increase in radialisation levels in the truck/bus segment in India. The demand for bias truck tires is projected to decrease.
The plant has a capacity of about 100 tonnes, of which 30 percent is already specialty/industrial tires.
After the conversion is complete, capacity is expected to reach 120 tonnes of tires per day.