GYONGYOSHALASZ, Hungary—More than 1,400 Apollo employees, vendors, dealers and dignitaries—including Hungarian Prime Minister Viktor Orban—were on hand April 7 to watch as Apollo Tyres Ltd. inaugurated its first greenfield plant outside of India, a $505 million car and truck tire plant in rural Hungary near Budapest.
Another 16,000 Apollo employees watched the ceremony live-streamed over the Internet.
The plant—Apollo's sixth worldwide—will have the capacity to produce 5.5 million passenger and light truck tires and 675,000 commercial vehicle tires per year once Phase I is complete. It will produce both the Vredestein and Apollo brand of tires for the European market.
"With this inauguration today, we have crossed another milestone in our global growth journey," said Onkar Kanwar, chairman of the company. "This facility will help us further increase our presence and market share in Europe. From being a replacement-market focused company in Europe, we would soon be starting supplies of our tires to all the leading OEs in Europe."
The 1.6-million sq.-ft. plant is situated on a 180-acre plot of land located near Gyongyoshalasz, a community of 2,500 residents surrounded by rolling hills and greenery about 50 miles east of Budapest.
Orban returned to the plant to celebrate the inauguration 24 months after he helped lay the foundation stone of the plant, calling the project one of "national importance." He told the onlookers that the plant not only has made a strong relationship between India and Hungary even stronger, but also he and his fellow Hungarians look at the Apollo team as family.
"They are now part of the great family of Hungary," he said. "As a result of this plant, they bring more employment to our region. This is important for our people."
Kanwar and Orban, along with Kanwar's son, Neeraj Kanwar, vice chairman and managing director of Apollo, broke coconuts together on stage as part of a traditional Indian ceremony.
Others on hand for the inaugurations were Peter Szijarto, Hungary's Foreign Affairs and Trade Minister and Rahul Chhabra, India's ambassador to Hungary.
The Hungarian facility is Apollo's second in Europe. The other is located in Enschede, Netherlands, and operates under the Apollo Vredestein B.V. name. It produces high-end passenger and specialty tires.
The tire maker's largest facility is located near Chennai, India, and is one of four located in the country. Those four have the capacity to produce 1,450 metric tons of tires per day.
Apollo, the world's 17th-largest tire maker, has more than 16,000 employees worldwide, with sales of $1.8 billion in the fiscal year 2015-16. Europe accounts for about one-third of Apollo's global sales.
Now that the Hungarian plant is operational, work continues on another factory under construction on the southeast coast of India.
Neeraj Kanwar, however, has his sights set on the North American market, specifically the U.S. and Canada. He said his goal is for 10 percent of Apollo's revenue to be driven by the North American market within five years.
"First we have to have product," Neeraj Kanwar said. "We have to have 70 percent of the market covered."
To achieve this, Apollo would need to build a plant in the U.S. within the next four or five years, according to Neeraj Kanwar. Apollo, he added has already has looked at possible sites in five or six states.
"The U.S. clearly is my No. 1 priority going forward," Neeraj Kanwar said. "It is important for us to create a strong presence there."