Apollo Tyres Close To Buying Chinese Firm

Thiruvananthapuram, July 25: | Updated: Jul 26 2002, 05:30am hrs
The Rs 1700-crore Apollo Tyres is awaiting clearance from the Chinese government for picking up the majority stake in a Chinese tyre company. Along with a German collaborator, the company has been negotiating with a Chinese public sector unit and the terms have been almost accepted. But its only the Chinese Governmental delay that was stalling the decision, Me Onkar Kanwar, vice chairman and managing director of Apollo Tyres told here at press conference on Thursday.

The company aims to take up 75 per cent stake with an investment to the tune of $15-20 million. Capacity utilisation, productivity and work culture was among the best in Chinese tyre units and this accounts for the low price of the product, Mr Kanwar said while adding “ what was lacking was quality management input.”

Initially, the proposed Chinese acquisition will not produce for the Indian market, but at a later stage it will have to, he said. Chinese tyres are primarily not suitable for Indian roads. The Indian roads need sturdy quality tyres because the road conditions are not good and the loading pattern is very heavy.

The company has made an 18 per cent improvement in net sales despite the overall poor performance of the tyre industry.

This has been primarily due to the dealer-enhancement programme. Apollo Tyres, largely a dealer-oriented company, had approximately 3200 dealers in its network when it recently enhanced it by including 300-400 more.