Apollo confirms plant site in Hungary

(Tire Business Report)

Budapest – Apollo Tyres has confirmed a site in north-central Hungary as the location of the $635 million (€493m) tire plant it plans to build over the coming five years.

“This investment would be our first one into a Greenfield facility outside of India and would be a significant milestone in the company’s international growth journey,” Apollo vice chairman and managing director Neeraj Kanwar said at a press conference in Budapest.

The site is at an industrial park near Gyöngyöshalász, a community of about 2,500 and roughly 65 miles (104 km) east of Budapest.

“Our aim is to create a benchmark manufacturing facility, which would further increase our competitive strength in the European market.”

As ERJ reported in September, the site was disclosed when the European Commission disclosed it was granting approval for Hungary to provide investment aid of nearly $124 million for the project.

Peter Szijjarto, the Hungarian Parliamentary State Secretary to the Ministry for Foreign Affairs and Trade, said: “Apollo’s Hungarian investment is an important step in the re-industrialisation of Hungary.”

Hungary was chosen after a consideration of various factors over some of the neighbouring Central Eastern European and Asian countries, Apollo said.

Once completed, the plant will have a capacity to produce 5.5 million passenger and light truck tires and 675,000 heavy commercial vehicle tires per year, in both Apollo and Vredestein brands. At full capacity, the plant will employ 975 workers.

Thus the plant will cater to the European market and complement Apollo Tyres’ existing facility in the Netherlands.

The site is in close proximity to various OEM manufacturers as potential customers, Apollo said, and as such the company will start applying for necessary permissions and licenses to set up the facility and initiate an environmental impact assessment.

Apollo hopes to start construction by spring 2015 in anticipation of starting commercial-scale production by early 2017.

Kanwar further added: “Apart from providing direct jobs to 975 people, of which the majority would be hired locally, this facility will also lead to the creation of indirect jobs and contribute significantly to the development of the region.

“As an organisation, we strongly believe in ‘Care for Society,’ and we would actively participate in addressing the health, safety and environment issues of the community.”

Apollo Tyres’ existing manufacturing base comprises for plants in India, two in southern Africa and one in the Netherlands with a combined production capacity of 1,700 tonnes daily.

Photo: Peter Szijjarto and Neeraj Kanwar announcing Hungary as the location for Apollo Tyres' first Greenfield facility outside India