Apollo plant search eyes Hungary, Slovakia

Apollo Tyres Ltd. has narrowed its search for the tire plant it’s planning to build in Europe to two sites, in Hungary and Slovak Republic, according to Luis Ceveniz, president of Apollo Vredestein B.V., responsible for Apollo Tyres’ Europe, Sub-Saharan Africa and Americas businesses.

Apollo’s board of directors recently approved an investment of $685 million over four years to build a car and truck tire plant in eastern Europe, but until now the Indian tire maker hadn’t released details about possible sites. Mr. Ceneviz, speaking with Tire Business at the Reifen show in Essen, said Apollo hopes to make a final decision in the next two to three weeks.

The company’s board said it envisions a plant with capacity for 16,000 passenger and 3,000 truck tires a day at full capacity. That equates to about 900,000 metric tons of processed rubber a year, he noted. The capacity in the first phase will be about 250,000 tons.

Mr. Ceneviz, who’s been head of Apollo Vredestein since late 2012, said the plant will be built on a modular plan, allowing it to be expanded gradually and efficiently when certain demand niveaus are reached.

Apollo’s search for a plant started with 11 sites, Mr. Ceneviz said. The selection criteria comprise labor skills, costs, raw materials and infrastructure, along with investment incentives offered by the nations and/or regions being considered.

The plant will support Apollo’s «ambitious and aggressive» growth strategy in Europe, according to Marco Paracciani, global chief marketing officer, who said the group had recently «seen a bottoming out of a negative trend and [where] Apollo has outpaced the market».

Apollo Tyres, he said, had grown 17 percent in the last 12 months in the replacement market in Europe—against an average market growth of only 5 percent—and built on its market share, which on average in Europe is about 3 percent.

«It is a small number but we take comfort that in the largest market in Europe, Germany, we now have a six-percent market share. This places us among the top five players in the country», - the Apollo marketing chief concluded.

Europe represents nearly 30 percent of Apollo’s global sales, according to the firm’s recently released fiscal 2014 results. That amounted to $685 million last year.

At the Reifen exhibition this week, Apollo Vredestein launched the Apollo Alnac 4G All Season and Alnac 4G Winter and Vredestein Ultrac Vorti ultra-high-performance tires.

Both tires were developed in Apollo Tyres’ Global R&D Centre in the Netherlands and have been optimized to suit the requirements of European drivers and the European road network, Apollo Vredestein said, while expanding the Alnac product line.

The asymmetric-tread all-season tire, available starting in September in a dozen 15-, 16- and 17-inch rim diameter sizes, will help Apollo Vredestein compete in a growing market niche, Mr. Ceneviz said.

The Y speed-rated Ultrac Vorti UHP radial is the latest collaboration with the Italian design house Giugiaro Design. The Vorti name is derived from vortex air flow that is generated, for example, when a helicopter takes off, Apollo Vredestein said, reflecting speeds and forces that the Ultrac Vorti can handle.