Apollo Tyres

completed

Apollo Tyres Limited (ATL, or the company), India''s second largest tyre manufacturer by turnover, is proposing a US$51 million investment program to be implemented over two years, comprising:- (i) construction of a new Truck Radial line (US$ 30 million) at its existing plant in Baroda, India, which currently manufactures cross ply tyres for all applications and passenger car radial tyres. Some of the processes which are common to the manufacture of radials and cross ply tires will be shared with the existing facility. ATL proposes to build this capacity in a modular fashion as the current demand for truck radials is very low. The first module will have a production capacity of 400 tyres/day and is expected to start commercial production by June 2004. Continental AG of Germany will be the technology and equipment supplier; they have indicated that all of the equipment being provided are of state of the art technology and will be refurbished before shipping; (ii) Debottlenecking and balancing existing cross-ply operations (US$ 6.2million). The company plans to invest US$6.2 million over the next year to increase its capacity at Perambra plant in Cochin from 132 to 200 MT per day and at its Kalamassery plant in Cochin from 58 to 78 MT per day; (iii) Maintenance capital expenditure to upgrade and modernize (US$8.0 million); and (iv) Improving maturity profile of debt ($US 6.8 million).