Mumbai: Apollo Tyres has accepted an invitation by the Hungarian government for setting up a tyre manufacturing facility in that country.
The invitation was made by Hungarian prime minister Ferenc Gyurcsany to Onkar S Kanwar, chairman and managing director of Apollo Tyres Ltd, on the sidelines of the Partnership Summit 2008.
Gyurcsany met Kanwar this morning to discuss plans for setting up a manufacturing facility in Hungary. Kanwar said he accepted the invitation in principle, on behalf of the company, subject to approval by the board and regulatory clearances.
Apollo Tyres, he said, 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 have agreed to finalise plans early in the coming financial year.
"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," Gyursacy said at a media briefing.
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.
"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," said Kanwar, chairman & managing director of the company.
Apollo Tyres' board of directors had yesterday approved Rs220 crore investment 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. This investment is in the first phase of the project, also to be completed in the next 18 months.
"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," added Kanwar.