The International Finance Corp. has agreed to partially finance Apollo Tyres’ new greenfield facility in India.
On Apr. 22, the World Bank organization stated that, pending the consent of its board on May 26, it will furnish Apollo with a financial package of $60 million. Phase 1 of the plant, located in Oragadam near Chennai, is nearing completion, and the commercial production of tires there began in the first week of March 2010.
Total costs for the project are estimated to be $515 million. This investment will not only enable Apollo to establish a greenfield passenger car and truck/bus radial plant; the funds will also be directed towards the expansion of the company’s facility in Vadodara, Gujarat. At this site Apollo has expanded passenger radial production and established a production line for mining and other OTR tires. In all, the project will increase Apollo Tyres’ manufacturing capacity from 27,500 tires per day to 50,000 tires per day, with the main increases being a threefold increase in passenger radial capacity and a 12-fold increase in truck and bus radial capacity.
The greenfield site in Oragadam covers 128.5 acres, of which 30.5 are built upon. Apollo expects passenger tire production there to reach its full capacity of 8,000 tires a day by July 2010 and truck and bus radial to arrive at its full capacity of 6,000 units a day by April 2011. The company’s OTR and passenger tire production lines at the Limda plant in Vadodara have been completed and commercial operation commenced.
According to the IFC, the greenfield project will result in the creation of about 1,500 skilled and semi-skilled permanent jobs and an additional 2,000 jobs during the construction phase. The project will also result in the establishment and development of new small and medium enterprises in the supply chain. (Tyres & Accessories)
