"We will go for another price revision soon," Neeraj Kanwar, Apollo's managing director told Dow Jones Newswires on the sidelines of the India Economic Summit. "The input costs, especially rubber, have been rising. We are trying to absorb most of these costs but rubber prices have shot up to 120 rupee per kilogram now."
Apollo raised tire prices between 2.5% and 3% in October because of higher prices of natural rubber, one of the key raw materials for producing tires.
Kanwar said tire demand in the current quarter will lag that of the July-September quarter.
"The demand in the (fiscal) third-quarter is usually low due to the onset of winters. But nonetheless, we have seen very robust demand in the first two quarters and expect overall sales to grow in double-digits in the fiscal year (through March 31)," Kanwar said.
Apollo will start production at a new tire factory in the port city of Chennai by Dec. 1, he said. The company is investing INR20 billion to build the new factory.
Kanwar said the factory will have a peak production capacity of up to 6,000 truck and bus radial tires, as well as 8,000 passenger car radials, per day.
"The plant should touch its peak capacity by the middle of next year," Kanwar said.
He said also Apollo will launch its brand of tires in Europe via its Dutch unit Vredestein Banden B.V. Apollo acquired the Dutch firm in 2008 for an undisclosed amount.
"The acquisition gives us a footprint in Europe and we plan to introduce our brand of tires through the Dutch company by early 2010," Kanwar said.
He said also Apollo will export tires to Europe from India.
(Source: irco.biz)
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