Apollo Tyres plans to invest nearly $300 million to set up a plant in Hungary that would cater to the European and North American markets, top company officials said on Wednesday.
Apollo Tyres will be entering into a formal agreement with Hungarian authorities to acquire 50 hectares of land in Gyongyos, outside of Budapest city, Chairman and managing director of the company Onkar S Kanwar said.
The plant, with a capacity of 7 million tyres a year, will produce radial tyres for cars. The plant is expected to commence operations by the middle of 2009 and employ 5,000 people.
"The facility in Gyongyos will become our hub to service our passenger car radial customers in Europe and North America," Kanwar said.
"This is a key investment in our global strategy."
Separately, Hungary's Prime Minister Ferenc Gyursacy said Apollo will bring to Hungary its manufacturing expertise, technology and people management skills. Gyursacy was talking to reporters on the sidelines of a conference organised by the Confederation of Indian Industry.
Company officials said this projected investment in Europe, which would be made through internal accruals, compliments Apollo Tyres' planned investment in India.
On Tuesday, the company's Board approved a Rs 220 crore investment for the construction of a green field radial tyre production facility in Tamil Nadu.
"Apollo Tyres is currently in growth mode and the investments are part of our ongoing product and capacity expansion plans for our India operations. The domestic market is a crucial market for us and we will continue to ensure both market and customer demands are fulfilled," Kanwar said.
The company is expecting to double its revenue from the current $1 billion by 2010. The company has four manufacturing units in India, two in South Africa and two in Zimbabwe.
It has a network of over 4,000 dealerships in India, of which over 2,500 are exclusive outlets.
In South Africa, it has over 900 dealerships, of which 190 are Dunlop Accredited Dealers. The company had bought Dunlop Tyres in South Africa in 2006.