Jan 18 2008
On the sidelines of the Partnership Summit 2008, the Hungarian Prime Minister, His Excellency Ferenc Gyurcsany and Chairman & Managing Director of Apollo Tyres Ltd, Mr Onkar S Kanwar, met this morning to discuss the possibilities of setting up a manufacturing facility in Hungary. The Prime Minister extended an invitation to Mr Kanwar and Apollo Tyres, which he accepted in principle, on behalf of the company, subject to Board approval and regulatory clearances.
Apollo Tyres had been evaluating various options for a European manufacturing hub to service the European and North American markets. Hungary was one of the front runners from the beginning of the evaluation process, which began about nine months back.
The likely site of the project is in Gyongyos outside Budapest city, Hungary. Both parties agreed to make an all-out attempt to ensure a ground breaking ceremony at the new site early this coming financial year. Commenting on at a media briefing, Hungarian Prime Minister Ferenc Gyursacy said: “I am well aware of Apollo Tyres as a leading tyre manufacturer with a global expansion plan. We are very keen to have Apollo set up its first green field manufacturing unit, outside India, in Hungary. Apollo will bring to Hungary its world class manufacturing expertise, technology and people management skills.”
Apollo Tyres will be entering into a formal agreement with the Hungarian authorities for acquisition of 50 hectares of land in Gyongyos. This will be a dedicated passenger car radial tyre plant with a 7 million tyres a year capacity in the first phase. Phase 1 of the project is expected to be completed in 18 months with a projected investment of Euro 200 million.
Addressing the media, Mr Onkar S Kanwar, Chairman & Managing Director, Apollo Tyres Ltd, said, “So far, this is the largest investment made by any Indian company in Hungary. This manufacturing facility in Gyongyos, Hungary, will become our hub to service our passenger car radial customers in Europe and North America. This is a key investment in our global strategy. The Hungarian Prime Minister, the Investment Agency and all officials associated with this decision have been immensely helpful throughout our negotiations. I am extremely happy that Prime Minister Gyurcsany himself is present today to speak with you.”
This projected investment in Europe compliments Apollo Tyres’ planned investment in India. Yestreday, the Board of Directors approved Rs 2.2 billion for the construction of a world class green field radial facility in the recently acquired 135 acres of land in the Oragadam Industrial Park, outside Chennai city in Tamil Nadu. This investment is in the first phase of the project, also to be completed in the next 18 months.
Commenting on the investments Mr Onkar S Kanwar, Chairman & Managing Director, Apollo Tyres Ltd said, “Apollo Tyres is currently in a growth mode and the investments are part of our ongoing product and capacity expansion plans for our India operations. The domestic market is a crucial market for us and we will continue to ensure both market and customer demands are fulfilled at the earliest possible.”