The factory Apollo Tyres is building in India’s Chennai state will most likely produce Vredestein branded passenger car tyres. According to the Hindu Business Line, production of premium Vredestein tyres at the soon to be completed Oragadam plant will be supplemented by Apollo branded UHP tyres. These will be marketed in Europe from next January onwards.
Apollo Tyres has apparently decided to up its 2009 capital expenditure from Rs 7 billion to 9 billion (£113.0 million). Rs 7 billion (£87.9 million) of these funds will go towards more than doubling capacity at its new Chennai facility, which is anticipated to come on-stream later this year. The remaining Rs 2 billion will be used for expanding production at the company’s Baroda plant in India’s Gujarat state.
India’s Economic Times reports that New Delhi-based JK Tyre could be on the verge of making a deal to install a radial car tyre plant in Tamil Nadu, having met with regional government representatives.
Fancy a promising career in the tyre world without the hassle of buckling down at your studies? Don’t fret, where there’s a will, there’s a way. But before you decide to embark on a “fake it till you make it” approach to your newly chosen profession, consider the tale of two hopeful tyre industry specialists in India.
The unaudited Apollo Tyres results for the first quarter of the 2009-10 financial year, announced on July 23, show an overall year-on-year 24 per cent growth in revenues to Rs 16.3 billion (£204.8 million). Operations within India alone generated sales of Rs 11.8 billion (£148.3 million). Earlier in the day, shareholders approved an annual dividend payout of 45 per cent per share for the year ended March 31, 2009.
“Your company’s continuing attention to increasing efficiencies across the board and re-aligning costs to protect margins have paid high dividends,” commented Apollo Tyres chairman Onkar S Kanwar. “This has assisted us in improving margins and enabled your company to remain competitive.”
During the first quarter of 2009, Apollo Tyres launched its new corporate identity across its operations. Now it’s the turn of its website to don the new look and colours. Apollo has moved away from the earlier usage of black and red to the vibrancy of purple and orange, moderated by shades of grey – colours and usage, which no other tyre company has, and only a few companies across the world dare to incorporate. The colours have allowed Apollo, it says, to bring to the fore its “internal reality of youthfulness and dynamism”.
Indian media sources reports production at Apollo Tyres Oragadam Greenfield facility near Chennai will enter production by November 2009. The plant, which will produce both passenger car and commercial vehicle radials, will have an 8,000 tyres per day capacity.
London may have suffered enough torrential rain to close a couple of tube stations, but that nothing to the monsoon downpours experienced in countries like India. That’s why leading Indian tyre manufacturer, Apollo Tyres has kicked off a “Safe Drive” public awareness itiniative.
With heavy rains crippling normal life of Mumbai citizens, employees of Apollo Tyres drenched in rainwater, were busy at the Juhu and Andheri areas of Western Mumbai handing out the Safe Drive Handbook on Disaster Management, containing safety tips and useful numbers, to assist citizens of Mumbai in taking precautions to ensure a safe monsoon. This activity will continue till 14 July2009, at various traffic intersections and other important locations.
Apollo Tyres is set to release its results for the quarter to June 2009 on July 23. Advanced preliminary estimates for the period have already been released by research firm IIFL: According to IIFL, during the quarter Apollo’s sales are expected to increase 6.1 per cent year-on-year to Rs 11.415 billion (£145.45 million). Net profit is anticipated to increase 12.4 per cent to Rs 547 million (£6.97 million).
Apollo Tyres reports that its Hawkz 4×4 tyre has been selected as an original equipment feature on the Indian market Mitusbishi Pajero. The Japanese 4×4, said to be named after a certain South American wild cat – Leopardus pajeros (the vehicle is sold in the UK as the Shogun), is sold with the Apollo Hawkz in size 265/70 R15.
Following the official bankruptcy of Amtel-Vredestein NV in April, and the subsequent sale of Vredestein Banden and its subsidiaries to Apollo Tyres, the Russian holding company’s Kirov manufacturing operation entered voluntary bankruptcy on 22 June. OJSC Amtel-Vredestein entered bankruptcy on 3 June 2009 with subsidiary OJSC Tyre Complex AmtelChernozemje doing the same on 20 May 2009. According a report in the local Kommersant newspaper, the decision was reportedly made after accounts payable mounted up to 982 million rubles (£20 million) in the first quarter 2009 compared with a net asset value of about 840 million rubles (£16.337 million).
Kommersant estimates that the total debt load of Amtel-Vredestein’s Russian units adds up to more than US$450 million. Negotiations with creditors, the largest of which is said to be Sberbank, which is apparently owed US$100 million, are currently underway. However, the newspapers are also speculating about some more ‘creative’ kinds of debt restructuring. Arguably, the most interesting of these sees Kommersant name Pirelli as a foreign investor willing to expand its interests in Russia beyond the tyre production joint venture it signed with Russian Technologies in November 2008. Apparently certain government officials discussed the idea with the leadership of Amtel-Vredestein in late March. However, the newspaper also quotes Sibur Russian-Tyres director, Igor Karavaev as saying he considers it unrealistic that any investors will be able to purchase Amtel’s assets, especially foreign players.
Capital Advertising is to replace M&C Saatchi as Apollo Tyres’ passenger vehicle business creative partner, a role that will see it handle media related duties for the Indian manufacturer’s entire passenger car tyre range. Speaking to televisionpoint.com, Capital Advertising director Sunil Sachdeva director said Apollo Tyres has recently become a global player and has “very ambitious plans for the road ahead, it is the right time for us to partner them in this preposition.”
The advertising agency previously represented Apollo Tyres through its involvement in the launch of the manufacturer’s two wheeler tyre range almost a decade ago.
Indian news sources are reporting that Michelin is intending to sell the remaining 7.3 per cent shareholding it has in Apollo tyres. On June 6 2009, Michelin sold a portion of its Apollo stake for approximately 500 million rupees (£6.67 million). The French manufacturer, which held an 11 per cent share in Apollo at the time, sold 3.3 per cent through open market sales. The company has held shares in Apollo Tyres since it acquired a 14.9 per cent stake in early 2004, a deal made at a time when a truck and bus radial joint venture between the two companies seemed likely.
Despite the venture’s failure to get off the ground and the September 2005 announcement that Michelin would acquire Apollo’s share in the joint venture, Michelin maintained its stake in the Indian company. According to reports, the French tyre manufacturer has made “a reasonable profit” from the sale of its Apollo shares. The reports follows Apollo’s takeover of Dutch tyre maker Vredestein Banden for a reported 175 million euros in May.
India’s Automotive Tyre Manufacturers’ Association (ATMA) is seeking to have the customs duty on natural rubber waived in order to help domestic manufacturers compete against imported tyres. The issue was undoubtedly raised when Apollo Tyres chairman and managing director Onkar S Kanwar met with officials from India’s finance ministry on behalf of the ATMA in early June; as part of its pre-budget memorandum, the industry association has requested a reduction in the customs duty on natural rubber to 10 per cent from the current 20 per cent level. Alternatively, it has been suggested that the duty on the import of tyres could be raised to 20 per cent. Tyre imports from China and Korea, which account for nearly 80 per cent of all imports, currently attract 8.6 per cent duty under the Asia Pacific Trade Agreement.
Michelin has sold a portion of its shareholding in Apollo tyres for approximately Rs 500 million (£6.67 million). The French manufacturer, who held an 11 per cent share in Apollo, sold 3.3 per cent through open market sales. The company has held shares in Apollo Tyres since it acquired a 14.9 per cent stake in early 2004, a deal made at a time when a truck and bus radial joint venture between the two companies seemed likely. Despite the venture’s failure to get off the ground and the September 2005 announcement that Michelin would acquire Apollo’s share in the joint venture, Michelin maintained its stake in the Indian company.
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