BUDAPEST—India's Apollo Tyres Ltd. has confirmed a site in north-central Hungary as the location of the $635 million tire plant it plans to build over the coming five years.
“This investment would be our first one into a greenfield facility outside of India and would be a significant milestone in the company's international growth journey,” Neeraj Kanwar, Apollo vice chairman and managing director, said at a press conference in Budapest.
The site is at an industrial park near Gyongyoshalasz, a community of about 2,500 roughly 65 miles east of Budapest.
“Our aim is to create a benchmark manufacturing facility, which would further increase our competitive strength in the European market,” he said.
The site was disclosed earlier this month when the European Commission disclosed it was granting approval for Hungary to provide investment aid of nearly $124 million for the project.
“Apollo's Hungarian investment is an important step in the re-industrialization of Hungary,” said Peter Szijjarto, the Hungarian Parliamentary state secretary to the ministry for Foreign Affairs and Trade.
Hungary was chosen after a consideration of various factors over some of the neighboring Central Eastern European and Asian countries, Apollo said.
Once completed, the plant will have a capacity to produce 5.5 million passenger and light truck tires and 675,000 commercial vehicle tires per year, in both Apollo and Vredestein brands. At full capacity, the plant will employ 975 workers.
The plant will cater to the European market and complement Apollo's existing facility in the Netherlands.
The site is in close proximity to various original equipment manufacturers as potential customers, Apollo said, and the company will start applying for necessary permissions and licenses to set up the facility and initiate an environmental impact assessment.
Apollo hopes to start construction by spring 2015 in anticipation of starting commercial-scale production by early 2017.
“Apart from providing direct jobs to 975 people, of which majority would be hired locally, this facility will also lead to creation of indirect jobs and contribute significantly to the development of the region,” Kanwar said.
“As an organization, we strongly believe in ‘Care for Society,' and we would actively participate in addressing the health, safety and environment issues of the community.”
Apollo's existing manufacturing base includes four plants in India, two in Southern Africa and one in the Netherlands, with a combined production capacity of 1,700 metric tons daily.