State-owned heavy equipment maker BEML will lend Rs100-crore to Apollo Tyres for setting up of an off-the-road (OTR) tyre-making plant to meet the former's demand.

The two companies have entered into an agreement for the manufacture of the OTR tyres for the public sector firm, Apollo Tyres said in a release.

Apollo Tyres is investing Rs120 crore in Limda, in Gujarat, for setting up the first phase of the OTR tyre manufacturing unit, which will be dedicated to BEML. Apollo plans to make additional investments to enhance capacity over the next three years to manufacture radial OTR tyres.

Apollo Tyres will soon make delivery of the first set of 14 tyres manufactured at the plant to BEML's plant in Mysore. Regular production at the Limda facility, however, is expected in March.

BEML Ltd, a category 1 mini ratna public sector undertaking, was set up in 1964 for manufacturing rail coaches and spare parts and mining equipment. Government holds 54 per cent stake in the company.

During the last financial year, BEML achieved a sales turnover of Rs2,713 crore.

Apollo Tyres, which is on a cost-cutting effort, said it plans to lay off 1,500 casual and contract employees soon, chairman and managing director Onkar S Kanwar said.

''We will lay off nearly 15 per cent of our total workforce. The lay-off would be limited to casual and contract labour,'' Kanwar said on the sidelines of the annual general meeting of the Federation of Indian Chambers of Commerce and Industry (Ficci).

''The focus is to cut the flab since our margins are under pressure as the input cost has gone up by 45 per cent,'' he said.

However, Kanwar maintained that the growth in the company's topline would beat the expected industry average of 11 per cent in the current financial year.

''Our topline is expected to grow 19 per cent year-on-year and the bottomline will be better than last year,'' he said. For 2007-08 (Apr-Mar), Apollo Tyres had posted a total income of Rs 4,712 crore.State-owned heavy equipment maker BEML will lend Rs100-crore to Apollo Tyres for setting up of an off-the-road (OTR) tyre-making plant to meet the former's demand.

The two companies have entered into an agreement for the manufacture of the OTR tyres for the public sector firm, Apollo Tyres said in a release.

Apollo Tyres is investing Rs120 crore in Limda, in Gujarat, for setting up the first phase of the OTR tyre manufacturing unit, which will be dedicated to BEML. Apollo plans to make additional investments to enhance capacity over the next three years to manufacture radial OTR tyres.

Apollo Tyres will soon make delivery of the first set of 14 tyres manufactured at the plant to BEML's plant in Mysore. Regular production at the Limda facility, however, is expected in March.

BEML Ltd, a category 1 mini ratna public sector undertaking, was set up in 1964 for manufacturing rail coaches and spare parts and mining equipment. Government holds 54 per cent stake in the company.

During the last financial year, BEML achieved a sales turnover of Rs2,713 crore.

Apollo Tyres, which is on a cost-cutting effort, said it plans to lay off 1,500 casual and contract employees soon, chairman and managing director Onkar S Kanwar said.

''We will lay off nearly 15 per cent of our total workforce. The lay-off would be limited to casual and contract labour,'' Kanwar said on the sidelines of the annual general meeting of the Federation of Indian Chambers of Commerce and Industry (Ficci).

''The focus is to cut the flab since our margins are under pressure as the input cost has gone up by 45 per cent,'' he said.

However, Kanwar maintained that the growth in the company's topline would beat the expected industry average of 11 per cent in the current financial year.

''Our topline is expected to grow 19 per cent year-on-year and the bottomline will be better than last year,'' he said. For 2007-08 (Apr-Mar), Apollo Tyres had posted a total income of Rs 4,712 crore.