Apollo Tyres Limited, the second largest tyre company in the country, is on the threshold of a major expansion programme aiming at a turnover of Rs 5,000 crore and a net profit of Rs 500 crore in the next five years. The company is the leading manufacturer in the truck tyre segment in the country with a market share of nearly 25 per cent and is planning to boost its presence in steel radial tyre sector, according to N Sreekumar, Vice President (Manufacturing) of Apollo Tyres. He said the company is chalking out schemes with the aim of being counted among the leading five global tyre manufacturers by 2005.

With this objective in mind, the company is planning to set up a manufacturing facility in China. Negotiations have  already started with leading players for collaborations in the latest technology. The company is establishing the Chinese plant primarily with the East Asian and European markets in mind. It hopes to start production from its Chinese plant in a couple years.

The tyre major, which has six manufacturing facilities throughout  the country at present, is the first company to have been awarded ISO certification for the entire operation. The company has two plants in Kerala, at Perambra and at Kalamassery with a production capacity of 132 tonnes per day and 50 tonnes a day respectively.

As part of the expansion programme, the company has earmarked Rs 230 crore for capacity expansion of its Perambra and Kalamassery plants. For its Perambra plant, a sum of Rs 180 crore has been set aside to set up a steel radial tyre plant. With this expansion, the capacity of the plant will go up to 180 tonnes per day from the present 132 tonnes.

The Rs 50-crore expansion plan will raise the Kalamassery plant’s capacity to 100 tonnes from the present 50 tonnes. However, the decision on the expansion plan of the Kalmassery plant depends on the outcome of the long-term wage settlement which is due in April 2001, said a company spokesman.

During the current financial year, the company is poised to achieve a turnover of Rs 1,800 crore, an all-round better performance than the last financial year.

On the present scenario, Sreekumar said the automotive tyre industry is facing the threat of low-priced Chinese tyres and the impact of the economic slowdown. Because of  the price factor, Chinese tyres are more attractive than domestic players, even though they are of lower quality. The Automotive Tyre Manufacturers Association (ATMA) has already taken up the matter with the Union Government about the threat of tyre dumping by China.

He was of the view that domestic tyre manufacturers should also set up production facilities in other countries on a larger scale so that the country could achieve valuable foreign exchange and check the dumping of tyres by other countries to some extent. Moreover, global tyre leaders like Michellin, Bridgestone, Goodyear and Pirelli also pose a threat with advanced  technology and superior quality products.