Apollo Tyres is setting up a new modern greenfield facility at Chittoor district of Andhra Pradesh with an initial investment of Rs 1,800 crore to initially manufacture passenger vehicle radial tyres and consequently commercial vehicle and off-road tyres. At the event to lay the foundation stone, by AP chief minister N Chandrababu Naidu, the company’s chairman Onkar S Kanwar said that construction work will begin soon and the plant will start commercial production in the next 20-24 months. The per day production capacity will be around 16,000 passenger car radial tyres, he added. The planned facility is located in Chinnapanduru village, Chittoor district and being set up on 260 acre. The facility, Onkar said, will be utilised to meet both domestic and export demand. “It is going to be a long-term relationship with the AP government and this will be another modern and great factory. It is only the beginning and based on further demand, the company will invest more (taking the total investments to Rs 5,000 crore over the next few years),” he added. The plant will generate employment for 700 people in the first phase. “While planning for this state-of-the-art manufacturing facility, we have provisioned for the future capacity expansion requirements in India for the next 5 years and more. We are thankful to the AP Govt for excellent cooperation received from them so far,” Onkar said.
Neeraj Kanwar, vice-chairman and managing director, Apollo Tyres, told reporters after the event, “We are expanding more and we want to become one of the top tyre makers in the world. The company’s decision to set up a new greenfield capacity is aimed at meeting the growing demand for both passenger car as well CV tyres, particularly in the aftermarket. This plant will be also utilised for exports like the Chennai plant.”
To a specific question on why the company chose Chittor, Neeraj Kanwar said: “We have attained almost full capacity utilisation in our Chennai facility, which can make 16,000 PV radial tyres plus 9,000 truck and bus radial tyres a day. We have made a total investment of Rs 5,000 crore into Chennai plant over 8 years. Hence we chose AP to set up a new plant, because it is fast becoming an attractive investment destination.” The company will make 5.5 million PV radial tyres at the new plant in the first phase, he added. Since it will bring the latest automation technology from overseas plants in the Netherlands and Hungary, the company expects productivity to go up significantly.
In Chennai, the company employs 2,000 people and creates indirect employment for 1,000 more, he said. On the company’s plan to make two-wheeler tyres on its own, Neeraj explained, “We decide to make only high-end motorcycle tyres (for superbikes) in both bias and radial modes and the rest will be outsourced as we do now. The company will make an investment of `80 crore at our Baroda plant to make high-end bike tyres.”
Earlier AP chief minister Chandrababu Naidu, while assuring Apollo Tyres of his government’s full support in completing the first phase as early as possible, asked the company to look at investments in the state’s proposed logistics park as well as in the healthcare sector. Naidu further asked them to look at the educational sector in the state.
Naidu said the state is aiming to become one of the top three states, as far as investments are considered by 2020, and the top state by 2029. The state is planning to create a conducive atmosphere to develop an auto cluster around Chittoor. With the entry of Hero MotoCorp, Kia Motors of Korea, Isuzu of Japan and Bharat Forge, the proposed Apollo Tyres plant will make the AP the right choice for investors who plan to manufacture, he pointed out.
