Apollo Tyres to invest around Rs. 1,700 cr in current fiscal in India.

Tyre major Apollo Tyres has said it is planning to invest around Rs. 1,600-1,700 crore during the current fiscal, a major chunk of wich will be for its Chennai facility. Additionally, it plans to spend about 200 million euros on its Hungary greenfield facility for the fiscal 2017.

Gaurav Kumar, chief financial officer, Apollo Tyres, said the broad capex for Hungary is 200 million euros and the company has already spent about a quarter of that. The investment will be mostly funded by internal accruals and fresh borrowings.

Once the investment is completed, the Hungarian facility will have a capacity of 5.5 milllion PCLT (passenger car and light truck) tyres, and 675,000 heavy commercial vehicle tyres annually.
Apollo Tyres' Chennai facility capacity will be increased to 12,000 TBR (truck-bus radial) and 16,000 passenger car tyres per day. This would be reached in a couple of years. Currently, the Chennai plant has a capacity of 6,000 TBR and 16,000 passenger car tyres per day.

Kumar said the Chennai expansion is progressing well and the company expects enhanced capacity to start coming on stream from the last quarter of 2016.

The company's gross debt for the India operations went up from about Rs. 690 crore to Rs. 970 crore due to the loans taken for the Chennai expansion.

'The Hungary plant continues to progress well and we expect to start commercial production in the first quarter of calendar year 2017,' said Kumar.

In terms of capacity utilisation, the company has shown improvement particularly in India where the utilisation levels have jumped up to around 85% from over 75% and for its European operations continue to operate in over 90% capacity.

BS