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Apollo Tyres' Reifencom acquisition puts it on course to become a global biggie

The Delhi-based tyre company said the new logistics and retail entity has been acquired for euro 45.6 million (around Rs 320 crore). This acquisition would further expand its trading presence to six major markets - Germany, France, Italy, Austria, Switzerland and Denmark.

twitter-logo Chanchal Pal Chauhan        Last Updated: December 10, 2015  | 15:45 IST
Apollo has been on an aggressive expansion drive with the aim to displace Chennai-based MRF Tyres to emerge as the largest Indian tyre company.

Senior assistant editor Chanchal Pal Chauhan
Apollo Tyres may not have emerged as the world's seventh-largest tyre company last year on its unsuccessful takeover bid for Cooper Tire & Rubber Company of the US, but India's second-largest tyre maker is on course to add new value to its business after announcing the acquisition of German tyre distributor Reifencom GmbH on Monday.

The Delhi-based tyre company said the new logistics and retail entity has been acquired for euro 45.6 million (around Rs 320 crore). This acquisition would further expand its trading presence to six major markets - Germany, France, Italy, Austria, Switzerland and Denmark.

Apollo has been on an aggressive expansion drive with the aim to displace Chennai-based MRF Tyres to emerge as the largest Indian tyre company.

It has already lined up a euro 475-million investment for a greenfield facility in Hungary that is likely to go on-stream over the next four years.

Besides, fresh investments worth Rs 2,700 crore to double its production capacity at the Chennai plant over the next three years is already in the pipeline.

One of the biggest success stories in the Indian automotive tyre space, Apollo is now set to become a significant entity after starting one of the most arduous journeys, right from a battled bankruptcy that had wiped out its entire capital base in the late 1970s, followed by a series of broken technology pacts with international players.

But eventually the struggle helped Apollo emerge as amongst India's top tyre makers and join the main league under the astute leadership of Neeraj Kanwar. It has a successful streak of companies under the group and had earlier acquired Dunlop in South Africa and Dutch tyre maker Vredestein Banden in May 2009.

Kanwar now has successfully integrated Vredestein into the company, and is eager to emerge as the tyre market version of Samsung (in electronics) or Zara (in fashion) in the world. "After emerging as India's leader for the lucrative truck and bus segment as key player in the passenger car market, the new acquisition is a strategic fit in further growing our European business," says Kanwar. "It will enable Apollo to improve its mix of distribution channels in Germany and Europe and aid in increasing the visibility of Apollo and Vredestein tyres in the offline and especially the fast growing online retail space."

Reifencom GmbH is largely into logistics. Besides all kinds of tyres, it also deals in automotive rims. The new company would expand the distribution network of Apollo in the highly competitive market of Europe, and would help it to take on global biggies like Michelin, Continental and Pirelli, which dominate this market.

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