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Apollo pushes forward with upgrade of Indian tire plants

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GURGAON, India—The board of directors of Apollo Tyres Ltd. has approved $340 million to improve two tire plants in India.

The projects will expand and modernize its radial truck tire plant in Chennai and convert a bias-ply truck tire plant in Kalamassery to specialty/industrial tires.

Employment details with regard to the Chennai facility are still in the works, an Apollo spokesman said.

The firm does not project an employment increase at Kalamassery in conjunction with the conversion.

Apollo said the investments were planned considering the outlook for demand of truck and bus radials and for specialty/industrial tires. A spokesman said there already is an increase in demand in the truck/bus segment in the Indian market, and that is expected to continue in the next few months.

The firm is seeing good demand for its off-highway tires in the export market, the spokesman said.

“With the new government in place in India, the industry is very positive of reforms and policies to be implemented,” the spokesman said. “While the economy is looking up, the demand also has started increasing for tires. The recent decision by the Honorable Supreme Court in India to re-start mining in a few states also will result in increased movement of commercial vehicles on the roads, and hence, the demand for tires.”

When complete, the firm said capacity at Chennai—which the spokesman said has so far experienced returns sooner than projected through its four years—will increase by almost 50 percent to 8,900 units a day.

The spokesman said the expansion in Chennai will not increase the physical building size but rather take place in-house as planned during the initial startup.

There is vacant area beside the current facility for additional capacity.

The conversion of the Kalamassery plant will occur over the next three to four years, the spokesman said. After the conversion is complete, capacity is expected to reach 120 metric tons of tires per day.

Kalamassery has a capacity of about 100 tons, of which 30 percent is already specialty/industrial tires, according to the spokesman.

He said with the increase in radialization levels in the truck/bus segment in India, the demand for bias truck tires is projected to decrease, which is why Apollo is converting the facility.