Apollo Tyre to invest Rs. 1,800 crore for greenfield plant in Andhra

Apollo Tyre, one of the key players in the tyre industry, is setting up a greenfield plant at Andhra Pradesh with an investment of Rs. 1,800 crore. The production capacity of passenger vehicle tyre in this proposed plant will be around 55 lakh tyres per annum, in the first phase. The production in the first phase is expected to commence in two years after the start of construction, which will expected to start in 6 months.

The company’s decision to expand its capacity will help meet rising demand for passenger vehicle tyres and diversify into other categories. The company will fund this expansion through both internal accruals and raising debt. The plant will be set up in 200 acres of land. Currently, Apollo Tyre has four production plants, of these two (including a leased facility) are in Kerala and one each in Gujarat and Tamil Nadu.

According to Onkar Kanwar, Chairman of Apollo Tyres, company has taken into consideration next five years demand, while planning for capacity expansion.

However, investors did not seem to be excited with this development. The stock of Apollo Tyre open on Tuesday at Rs. 283 and touched day's high of Rs. 288.7, up 1.7 per cent from the previous close of Rs. 283.8. The stock close for the day at Rs. 285.6, up by 0.63 per cent.