Apollo Tyres to invest Rs 2,700 crore in Chennai plant to double production
Published On 04-Jun-2016 02:10:18
[caption id="attachment_734" align="alignnone" width="1024"] Apollo'Chennai Plant has a production capacity of 500 metric tonnes/day[/caption]
Apollo Tyres is planning to make an investment of Rs 2,700 crore at its Chennai plant. This investment will most likely double up the production capacity of the plant in over the next three to four years. At its annual general meeting held at Kochi, the company spokesperson said that its June quarter consolidated with a net profit of 27.5 per cent year-on-year, mainly due to strong operational performance and low financial cost. However, due to the lower demands, the revenue of Rs 2,845.3 crore meant a drop of 12 per cent compared to last year.
According to the Chairman OS Kanwar, increasing imports of commercial vehicle tyres has adversely affected the company's India operations. On the other hand, Apollo's European operations reported a flat growth.
The company said that it will raise Rs 2,000 crore through financial instruments such as rupee-term loan, foreign currency-term loan, external commercial borrowing and non-convertible debentures. The remaining Rs 700 crore will be secured from the company's internal accruals.
OS Kanwar said, "In a slow-growth market across geographies further marred by unregulated import of tyres, we have planned and invested to capitalise on future opportunities. This strategic planning will reduce our dependence on a particular market for growth and help us expand global footprint."
Last year, Apollo Tyres announced heavy investment of Rs 3,325 crore for setting up a green-field facility based in Hungary. Updating us about the Hungary facility, Chairman OS Kanwar said, "We are the first Indian tyre company to set up a green-field overseas (Hungary) where the production is expected to commence by 2017 that would make us more competitive in the highly-profitable European markets and our truck-bus radial capacity in Chennai is being increased to 12,000 tyres per day from the current 6,000 tyres."