Sumitomo Rubber Set To Take Over Apollo Tyres South Africa

Sumitomo Rubber Industries would be taking over Apollo Tyres South Africa including the Ladysmith Tyre plant and Dunlop Brand rights in Africa, BSE states. The acquisition would cost Sumitomo $60 Mn and the deal is expected to conclude in next four months.

Sumitomo Rubber Industries is a Japan based manufacturer of automotive tyres and industrial rubber products.It has factories in Japan, China, Indonesia, Malaysia, Vietnam, Thailand and Brazil.

Apollo Tyres had acquired the Durban, South Africa headquartered Dunlop Tyres International in 2006, and renamed it Apollo Tyres South Africa Pty Ltd.

In order to ensure no jobs were lost in this entire process, all employees of the company, other than those in the Durban plant, will continue with ATSA.

With this deal, Sumitomo will get a manufacturing location on the continent and control over the Dunlop brand, which it can also use in many other countries across the world. Both the companies will also undertake contract manufacturing of their respective brands at each other’s facilities to have locally manufactured products available for the market.

Apollo holds the rights to sell the Dunlop brand in 32 countries of Africa.

The company will retain the Durban plant, through the Holding Company of ATSA, which manufactures truck and bus radial tyres and off highway tyres and all employees attached to it. It will continue to sell the Apollo, Vredestein and Regal brand tyres in Africa while focusing on creating and strengthening its own sales and distribution network across the continent.

Apollo is looking forward to expand its domestic and international operation and has allotted R500 Cr to it.

The company's capacity in India stood at 45,000 tyres a day in the car segment, 5500 tyres a day in the truck-bus radial tyres (TBR) segment while truck cross-ply capacity stood at 10,000 tyres a day. In tonnage, capacity stood at 1400 MT a day with utilisation levels at 75%.

In Europe and South Africa company’s capacity utilization is around 85% and 70% respectively.

It has a manufacturing presence in Asia, Europe and Africa and exports to over 118 countries.

This month, Apollo has set up its second exports hub in Thailand to cater to the ASEAN region, which contributes 40% to the company's overseas income.

Recently it was reported,global investment firm KKR has entered into a definitive agreement to acquire a 90% stake in Alliance Tire Group, a global tire maker specialising in producing off-highway tires from Warburg Pincus and Yogesh Mahansaria, founder of ATG.