Increasing ag focus: Apollo Vredestein reducing PCR production in Netherlands plant

During a conference call held this month, the chief financial officer of Apollo Tyres Ltd. confirmed that passenger car tyre production at the Apollo Vredestein plant in Enschede, the Netherlands would be reduced as capacity for these products grows in the company’s new, more cost-competitive facility in Gyöngyöshalász, Hungary. However, this trend shouldn’t be seen as a transfer of capacity, as the plan for Enschede going forwards is for its continued utilisation, with greater emphasis placed upon other segments.

Gaurav Kumar stated that while the Enschede plant has operated at a capacity of 18,000 tyres a day, the joint capacity of the Enschede and Gyöngyöshalász factories will total 28,000 tyres a day by the end of March 2019, the close of the company’s current financial year – and Enschede will at most only account for 16,000 of these.

Kumar expects available capacity for passenger car tyres in Gyöngyöshalász, which had reached 7,000 pieces a day by the start of August 2018, to “be in excess of 12,000 tyres per day” by the end of the financial year. “This is available capacity (in Gyöngyöshalász),” said Kumar. “And we would target to work as close to that because also at these capacities, already by second half (from October 2018) the Hungary cost of production should start becoming cheaper than the Netherlands cost of production.”

While current measures will see capacity in Enschede reduce to around 16,000 tyres a day, Gaurav Kumar suggested at a recent event in Hungary that daily capacity in the Netherlands may further decline to around 14,000 tyres at a future date. Apollo Vredestein confirms that output in regards to the number of tyres made will decrease in Enschede, however it stresses that production tonnage will remain at current levels. Car tyre production within the plant will increasingly be dedicated to high-end products, while the production of agricultural tyres will also take on an increasingly important role for Enschede in years to come.