Apollo drops European factory plans – report
It appears Apollo Tyres may have shelved its plans to establish a greenfield plant in Eastern Europe. Indian Financial Daily the Financial Chronicle writes that the tyre maker has “decided to drop its tyre plant proposal in the Eastern Europe region now due to declining volumes and uncertain economic environment.” Further details were not supplied.
This is not the first time Apollo has considered, and then set aside plans for a factory in Eastern Europe. In late 2007 and early 2008 Apollo examined several Eastern European sites, including Gyöngyös, near the Hungarian capital Budapest, with the intention of setting up a greenfield facility. The tyre maker planned to invest some 200 million euros in a passenger car radial project that would give it an initial phase capacity of seven million tyres a year. Yet plans to build this “European Manufacturing and High Technology Centre” faltered in mid-August 2008 when Apollo admitted that production at the facility wouldn’t begin before 2010. Reasons given for dropping the plan at the time were “unexpected delays in administrative processes” and “a divisive referendum on the investment for the local community.”
While Apollo may have changed its mind on Europe, plans for Southeast Asia remain on track. In the same article that discussed Apollo’s European u-turn, the Financial Chronicle reports that the planned greenfield factory in Southeast Asia is “likely” to be set up in Thailand. The country has been on a shortlist along with Indonesia, and now the newspaper says Apollo is “close to completing land due diligence process in Thailand.” It also shares that the tyre maker’s initial investment in the project may be around US$250 million.