Apollo chooses Hungary for plant site

And the winner is: Hungary. In June, Apollo Tyres Ltd. had narrowed the location for its consumer and commercial tire plant to Hungary or Slovakia.

Hungary was chosen "after a consideration of various factors over some of the neighbouring Central Eastern European and Asian countries," says the company. It will be Apollo's first greenfield tire plant outside India.

Apollo will invest 475 million euros (close to $620 million) over the next five years to set up the facility in the new industrial zone near Gyongyoshalasz, Hungary. Once completed, the plant will have a capacity to produce 5.5 million passenger and light truck tires and 675,000 heavy commercial vehicle tires annually.

The new facility will produce both Apollo and Vredestein branded consumer tires and Apollo truck tires. It will cater to the entire European market and will complement Apollo’s existing facility in the Netherlands.

“This investment will be our first one into a greenfield facility outside of India and will be a significant milestone in the company’s international growth journey," says Neeraj Kanwar, vice chairman and managing director. "Our aim is to create a benchmark manufacturing facility, which would further increase our competitive strength in the European market.”

Peter Szijjarto, Parliamentary State Secretary to the Ministry for Foreign Affairs and Trade, Government of Hungary, says the investment "is an important step in the re-industrialization of Hungary.”

The chosen site is less than 62 miles from the capital city of Budapest, and is located in close proximity to various vehicle manufacturers (Apollo calls them "potential customers").

The company in in the process of applying for the necessary permissions, licenses and Environmental Impact Assessment to build the facility. Apollo says construction tentatively will begin in the spring of 2015; the first tire is expected to roll out in early 2017.

"Apart from providing direct job to 975 people, of which majority would be hired locally, this facility will also lead to creation of indirect jobs and contribute significantly to the development of the region," says Kanwar. “As an organization, we strongly believe in ‘Care for Society,’ and we would actively participate in addressing the health, safety and environment issues of the community.”

Apollo has four manufacturing plants in India, three in southern Africa and one in the Netherlands. The combined production capacity of all facilities put together is 1,700 tons per day.