Apollo Tyres Ltd signs MoU with Tamil Nadu Government

Onkar S Kanwar, chairman and managing director of Apollo Tyres Ltd, today signed a Memorandum of Understanding with the Tamil Nadu government to acquire 135 acres of land, in the Oragadam Industrial Park, 11 kilometres from Sriperumbudur, Tamil Nadu. The company says that it plans to build a radial tyre production facility. The factory will initially produce 75 tonnes of tyres per day, rising to 250 tonnes or more over time, according to the company.

“We intend to build one of the finest and most progressive radial tyre manufacturing units here in Oragadam. We will be investing 3 billion rupees [£33.75 million] in the first stage, with the final investment reaching between 4.5 and 5.3 billion [£50.61 million and £58.5 million] by the end of five years. The radial technology which will be used, is currently being developed by us in Apollo, using our internal R&D expertise. This fresh capacity will allow us to produce technology products across categories for both the OE and replacement markets,” said Mr Onkar S Kanwar, chairman and managing director, Apollo Tyres Ltd.

Apollo Tyres crossed a turnover of 30 billion rupees (£337 million) in 2005-06. The company currently has three tyre and one tube plant in India. The Tamil Nadu unit will be used exclusively for the manufacture of truck, bus and light truck radial tyres, along with high and ultra-high performance passenger car radial tyres for the domestic and the export markets. The company expects to complete the Tamil Nadu project within a time span of 24 to 36 months.

Tamil Nadu was chosen as a location due to its proximity to the rubber growing region, the presence of automobile manufacturers in the state, good connectivity to the domestic market and proximity to a port for ease of import of raw materials and export of finished products. The proactive approach of the Tamil Nadu government towards new investments and the availability of a ready local market with skilled manpower is also said to have played a role in choosing the location.