Indian Tyre Major Sets Up Hub In Dubai.

India’s leading tyre manufacturer Apollo Tyres Ltd announced on Thursday that it would set up a regional base in Dubai to help boost its business three-fold over the next hree years.

The $2 billion company, which has manufacturing plants in India and overseas, said Dubai’s strategic location and its $1.5 billion tyre market positions it as a high potential regional hub.

Apollo’s Dubai office facility is one of its largest outside of India. The 2,000 square feet office located in the JAFZA Free Economic Zone will be the company’s base in Dubai, and the reporting base for employees in Iran, Saudi Arabia and Turkey, said Satish Sharma, chief, India Operations, Apollo.

He said the Dubai foray marked the second phase of Apollo’s global expansion. “The Middle East region has always been a natural extension of our markets in India. Our tyres have enjoyed a very high demand in the region, for years now. However, due to capacity constraints at our end, we have not been able to fulfill the local demand. I am happy that we have crossed that. With an active sales and service team based here, we will now be able to provide our customers in the Middle East the service and operational excellence they deserve,” he said.

Sharma said the new round of expansion would help reinforce Apollo’s leadership and boosting its revenues to $6 billion by 2016. “Our target is to increase sales in the Gulf region to $300 million,” he said at a media briefing.

Dubai itself is the largest tyre distribution hub in the region, and provides a booming domestic market with one car to every 1.8 individual, he said. The Middle East has traditionally been one of Apollo’s strongest export markets, out of India, accounting for about 30 per cent of export revenues. The company already has a distribution network in the Middle East, spanning 14 countries and 23 Business Partners. “The Middle East also has infrastructure and tyre usage very similar to India’s, which is why Apollo’s products have always enjoyed high acceptance in the region,” Sharma said.

Apart from an office, the company has also taken up an expandable 10,000 square feet of warehousing space in Dubai, to stock its tyres locally for speedy demand fulfillment in the region.

“The office, network of employees and local warehousing facility will allow us to address customer demands effectively; while our entire range of tyres tuned to this market, along with our service proposition, will allow us product leadership over time,” said Sharma. “This is a high potential market, where the Dubai tyre distribution and re-export trade is valued at $ 1.5 billion, and expected to grow by 30 per cent in the next five years. In that time frame I am looking at Apollo garnering a high single digit, if not 10 per cent of this market’s share.”

Apollo Tyres, which uses daily 1,300 tonnes of rubber to manufacture 30 million tyres per annum, is a leading player in truck, car and farm equipment tyres. Sharma said India exports 14 per cent of the annual tyre production valued at $20 billion.

He said Apollo has already invested around $250,000 in Dubai to create appropriate permanent infrastructure; and is projecting investments and expenses of around $1.5 million on an annual level.

Source : khaleejtimes.com