Hungarian Prime Minister Viktor Orban on Friday inaugurated Apollo Tyres’ greenfield plant located at Gyongyoshalasz, about 100 kilometers from Budapest, in the presence of Onkar S Kanwar, chairman Apollo Tyres, Neeraj Kanwar, vice-chairman of Apollo Tyres and officials from India and Hungary.
The plant, built over 72 hectares, is the largest greenfield investment by an Indian company in Hungary. The company is investing 475 euros (R3,500 crore) and the plant will have capacity to produce 16,000 passenger car tyres a day and 2,000 truck tyres a day. The construction of the plant began in 2015.
The new plant will produce both Apollo and Vredestein branded tyres to cater to the entire European market and will complement Apollo Tyres’ existing facility in the Netherlands. The plant is in close proximity to various original equipment manufactures such as Volkswagen, Daimler and Suzuki Motor Corp.
Assuring all cooperation and security in the future, the Hungarian Prime Minister said that history is changing. “The east is becoming dominant and India is an important destination is the east for investment in Hungary,” he said.
Onkar S Kanwar, chairman, Apollo Tyres said that with the inauguration of the greenfield plant in Hungary, the company has crossed another milestone in its global growth journey. “The 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 supply of our tyres to all the leading original equipment manufactures in Europe,” he underlined.
Apollo Tyres has four manufacturing facilities in India, one in The Netherlands and the new one in Hungary. In Europe, the company markets its products under its two global brands – Apollo and Vredestein, and its products are available across the world through exclusive and multi-product outlets.
Apollo Vredestein BV is part of Apollo Tyres and has its head office in Enschede, the Netherlands. It designs, manufactures and sells high-quality tyres under the Apollo and Vredestein brands in Europe and North America. The Vredestein capacity is about 20,000 car tyres a day.
In terms of consolidated revenue, three-fourth of Apollo Tyres’ revenue comes from replacement market and one-fourth from original equipment manufacturers. The truck tryes category contribute about 43% to the company’s revenues, passenger car tryes account for 40% and the rest consisting of light truck, farm and other categories. India contributes 69% to the consolidated revenue, Europe 26% and other geographies 5%.
The European tyre market is one of the largest markets in the world primarily focused on high performance tyres such as winter tyres, run flat tyres, energy efficient and high speed rating tyres. The European tyre market is expanding and is likely to grow by 2% over the next three to five years.
Apollo-Vredestein together have 5,800 third-party dealers in Europe and America and 13 European sales offices. Also, the acquisition of Reinfencon, Germany-based leading tyre distributor with online and offline presence has helped the company improve its mix of distribution channels in Germany and Europe.
In the nine months of FY17 (April-December), Apollo Tyres’ consolidated net sales was `9,794 crore as against `8,772 during the same period in FY16, registering a growth of 12% year-on-year. Net profit in nine months of FY17 was R871 crore, as compared with `851 crore during the same period in FY16.
(Travel for this report was sponsored by Apollo Tyres)