Apollo Tyres declare 50 % dividend, to invest Rs.500 cr this fiscal

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Kochi: The 38th Annual General Body Meeting of Apollo Tyres held today in Kochi declared an annual dividend of 50 % for the financial year ending March 31, 2011. The sales have moved up by 55% to Rs.28.2 billion for the first quarter ending June 30. The operating profit increased 20% to touch Rs.2.4 billion while the net profit rose 3.9 % to Rs.771 million during the same period. The company aims to become one of the top 10 global tyre companies in the next five years.

Onkar S Kanwar, Chairman, Apollo Tyres said, “The current year will be challenging for the company as inability to raise prices is having adverse impact on all Indian tyre manufacturers. The all-time high rubber prices along with sluggish growth in some major markets had a dampening impact on the company’s profitability for the quarter. Some of the players have already posted negative results which will influence overall investments in the sector. Though Europe continues to do well despite high raw material prices, the government inaction on large scale import of tyres into South Africa and the high cost of manufacturing and recurring wage negotiations have adversely affected the tyre industry”.

Meanwhile, with the domestic tyre industry facing a crisis due to the global shortage of natural rubber, Apollo Tyres has taken on lease about 10,000 hectares of land in Laos, in South-East Asia, for rubber plantation. It would take 2-7 years for the yield to be tapped.

Apollo’s largest unit is situated at Limda in Gujarat and its two other units are at Perambra and Kalamassery in Kerala. Its latest next generation plant is near Chennai and the four together have a combined production capacity of around 1,180 tonnes of tyres a day in India.

Apollo will invest Rs.500 crore this fiscal on its units in India and abroad. The company will pump Rs.40 crore into its Perambra unit in Chalakudy and Premier Tyre facility near Kalamassery. Apollo had declared a lockout some months ago at its Perambra unit.

Kerala Biz News

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