Tyre major Apollo Tyres has planned a capital expenditure (capex) of Rs 4,500 crore for financial years 2017-18 and 2018-19. The proposed capex includes setting up a new unit in India and expanding the existing facilities in Chennai and Hungary.
Gaurav Kumar, chief financial officer, Apollo Tyres, said the capex for FY18 across geographies was Rs 2,400 crore, which included expansion, maintenance, and capex for other projects. Of this, the Chennai plant would get close to Rs 1,000 crore. For FY19, capex is pegged at Rs 2,100 crore.
Speaking to analysts, Kumar said Apollo was increasing the manufacturing capacity of truck-bus radials (TBRs) from about 6,000 tyres a day to about 12,000. This, he said, was an ongoing expansion, and the facility now had a capacity of 9,000 TBRs a day.
The plant should have the full capacity by the second half of FY19, he added.
Similarly, the Hungary facility is in a ramp-up mode for passenger car tyres, and the capacity is increasing every day. In addition to the company’s existing facilities in India, Apollo is looking to set up a greenfield facility for passenger car tyres, where Apollo is facing capacity constraints.
The company expects its greenfield to be ready by 2019-20, which will manufacture, to start with, passenger car tyres. This is in the process of being discussed internally and all relevant details will be finalised shortly, said Kumar.
Apollo is planning to increase the capacity by 10 per cent through de-bottlenecking of passenger car tyre facilities in Chennai and Vadodara.