Apollo Tyres cancels Hungary project

Apollo Tyres cancels Hungary project
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First Published: Mon, Aug 18 2008. 11 21 AM IST
Updated: Mon, Aug 18 2008. 11 21 AM IST
Reuters
Mumbai: Apollo Tyres Ltd said on Monday that it was withdrawing its planned facility at Gyongyos, Hungary, citing administrative hurdles and division within the local community on the issue.
“The tyre maker would seek an alternative location elsewhere in Hungary or Europe,” it said in an e-mailed statement to Reuters.
Apollo Tyres said it was reconsidering the Hungarian project due to “potential divisions” within the Gyongyos community.
“The decision to withdraw from Gyongyos preempts the need to divide local citizens with a vote on the desirability of having this investment in the area,” the company said.
Apollo had said in January that it would invest about $294.9 million in the plant in Gyongyos with an annual capacity of 7 million tyres a year. It was to have begun initial production from June 2009.
The company, which is also investing around $320 million in India and South Africa to boost capacity, said the cancellation is likely to have “a short-term financial and resource allocation impact”.
The firm has received a number of offers from other industrial parks in Hungary for the planned investment, it said. Offers have also come in from Slovakia it added.
Shares of Apollo Tyres were down 1.53% at Rs35.40 in the Mumbai market.
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First Published: Mon, Aug 18 2008. 11 21 AM IST
More Topics: Apollo Tyres | Plant | Hungary | Withdraw | Auto |