Apollo Tyres signed a supplementary memorandum of understanding (MoU) with the Tamil Nadu government here Tuesday to scale up its investment in a new plant at Oragadam near here from Rs.1,650 crore to Rs.2,100 crore (about $460 million).
Apollo Tyres initially planned to invest only Rs.450 crore in the new plant.According to the state government, the company revised its investment plans so as to roll out 6,000 radial tyres for trucks and buses and 8,000 radial tyres for cars per day.
The supplementary MoU, incorporating the revised incentives offered by the state government to the company, was signed by Rajeev Ranjan, principal secretary (industries department), and K. Prabhakar, chief (projects) of Apollo Tyres, in the presence of Deputy Chief Minister M.K. Stalin.
Vaishali Jajoo, an automotive industry analyst with Angel Broking, said: “A bulk of the radial tyre demand in India is met through imports. Apollo Tyres is in an expansion mode in the recent times.”
She said manufacturing radial tyres is capital intensive than rolling out cross-ply tyres. As the selling price of radial tyres is around 20 percent higher than cross-ply tyres, the margins are better for the former.
