Considering the shortage faced by the domestic tyre industry for natural rubber, Apollo Tyres Ltd has acquired 10,000 hectares in Laos for a rubber plantation.
Mr Onkar S. Kanwar, Chairman and Managing Director, Apollo Tyres Ltd, said that the objective to acquire land abroad on lease is to meet 25 per cent of the company's requirement in the next five years.
Apollo is the first company to acquire land for growing rubber and it would take 2-7 years for the yield to be tapped, he said.
He told reporters, after a meeting of the company's board of directors, that the tyre industry in India is passing through a crisis due to increase in raw material prices and shortage of natural rubber.
At present there is a shortage of 2 lakh tonnes of rubber and the industry has requested the Government to allow duty-free import of rubber.
Mr Kanwar said the company proposes to invest Rs 500 crore in the current financial year to augment its production capacity in India and abroad.
Of the Rs 500-crore, €6 million would be invested in Europe, $30 million in South Africa and the remaining in India. The company will also invest Rs 40 crore in its Perambra unit in Chalakkudy and Premier Tyre facility in Kochi, he added.
The rest would be utilised for capacity augmentation at the Chennai plant, which manufactures tyres for trucks and cars. He said the plant capacity would be increased to produce 6,000 tyres per day for trucks, from 3,000 at present, and 16,000 cars tyres per day, from 8,000.
Mr Neeraj Kanwar, Vice-Chairman and Managing Director, said that the company aims to be among the top 10 global tyre companies in the next five years. The company's largest unit is situated at Limda, in Gujarat, and its two other units are in Perambra and Kalamassery, Kerala.
Its latest next generation plant is near Chennai and the four plants together have a production capacity of around 1,180 tonnes of tyres a day.
In South Africa, the Ladysmith and Durban plants account for a combined capacity of around 180 tonnes and the Enschede plant in The Netherlands adds another 180 tonnes a day, taking its total current production capacity to around 1,550 tonnes a day.
He pointed out that India is Apollo Tyres' largest market, accounting for 62 per cent of revenues, while Europe contributes 25 per cent and South Africa 13 per cent. The company exports tyres to over 70 countries from India, Europe and South Africa.
The drop in car sales in India is partly offset by exports to Europe, he said adding that there is every possibility for a further hike in prices of tyres due to increase in raw material costs and drop in OE sales.
