Apollo Expects Continued Sales Growth

Despite the possibility of a price increase between October and December this year (see ‘Costs, Prices Continue to Rise for Apollo’ – www.tyrepress.com), Apollo Tyres’ chairman, Onkar Kanwar has stated that Apollo will continue to see “15-20 per cent” annual sales growth, while “Volume growth will continue at the same level” over the next six months.

Kanwar also told news sources that the company’s planned 320 million US dollar investment in production capacity expansion in India and South Africa is on schedule and has not been changed in light of the worldwide financial climate. “I am very optimistic,” he told journalists. “There might be some slight slowdown temporarily, but starting first quarter (April-June 2009) it should start moving up.”

Kanwar went on to suggest that the benefits of the 38 per cent drop in the price of the benchmark rubber contract on the Tokyo Commodity Exchange (191 yen/£1.09) have yet to be passed on to tyre-makers: “Raw material suppliers are giving us delivery for one month with fixed prices. They have cancelled long term contracts. Lot of factories in chemical industry have been closed worldwide. So prices by raw material suppliers have not come down.”

Meanwhile, the company has yet to commit to a site in Hungary or its neighbours, following the withdrawal of its plans to build a new facility in Gyöngyös (‘Apollo Drops Hungarian Factory Plans’ – www.tyrepress.com): “We have had offers from lot of states. Our people are examining everything.” Kanwar added that Apollo was also looking for acquisitions.