>APOLLO TYRES: Expansion to aid growth

Fall in rubber prices will result in margin improvement for tyre companies: Amidst all the gloom and doom in the auto industry, tyre companies have something to cheer in the form of fall in rubber prices. Despite the falling rupee and sluggish demand, the correction in rubber prices may result in margin improvement for tyre companies in the coming quarters offering much needed margin relief. Domestic prices have come down from Rs.240/ kg to around Rs 185/kg i.e around 23% from its peak.


Expansion to aid growth: Apollo Tyres plans to invest around 400 million euro (over Rs 2,700 crore) to set up two new facilities in East Europe and Brazil in the next 3-4 years as it aims to expand its global footprint. The company already has a tyre manufacturing facility in South Africa in the city of Durban. The company expects production from Durban facility to move from 1,000 tyres to 1,200 tyres per day while, the company is planning increase the tyre production from Ladysmith facility to 13000 tyres from 10,000 tyres per day.


Increasing shift towards Radialization: Indian tyre industry lags far behind other developed countries when it comes to Radialization in Trucks and Bus Segment (T&B). The Indian markets are slowly converging towards radial tyres in CV segment. Tyre Companies are now continuously investing in radial capacity which is likely to improve turnover and margin performance due to change in the sales mix.


To read report in detail: APOLLO TYRES
RISH TRADER