COLUMBO, Sri Lanka (June 17, 2011)—India's Apollo Tyres Ltd. is setting up a joint retailing and distribution company in Sri Lanka with a local vehicle distributor, looking to break into a market in both the consumer and commercial segments.
The deal with Sri Lanka's Ideal Group of Companies involves a new company, Ideal Wheels & Tyres. The partners did not disclose the ownership breakdown or expected sales.
The venture partners estimate monthly demand Sri Lanka at 75,000 passenger tires and 55,000 truck tires, the latter of which is dominated by bias-ply tires, “a segment where Apollo enjoys a clear product technology and service leadership position,” the tire maker said.
The joint venture will focus initially on passenger and bias-ply truck and light truck tires and gradually expand to include truck/bus radial, agriculture and off-highway tires, Apollo said.
Ideal Group is active in the distribution of motor vehicles, spares, accessories and local solutions for the growing motor assembly business in Sri Lanka.
The move is Apollo's second export-driven move in recent weeks. Recently it opened an office and warehouse in Dubai, United Arab Emirates, to serve its Middle East customers.
The 2,000-sq.-ft. office in Dubai's JAFZA Free Economic Zone will be the firm's base there and the reporting site for employees in Iran, Saudi Arabia and Turkey, the company said. The firm also obtained an expandable 10,000-sq.-ft. warehouse to stock tires for quick fulfillment in the region.