Apollo Tyres Ltd. has completed the sale of some assets in Africa to Sumitomo Rubber Industries (SRI) for $60 million. The deal allows SRI to acquire Apollo Tyres South Africa (ATSA), including the Ladysmith passenger car tyre plant, and the Dunlop brand rights that Apollo had in 32 countries of Africa.
Apollo retains the Durban plant which manufactures truck and bus radial tires and off highway tires used in the mining and construction industries.
Apollo says the move is aimed at consolidating the Apollo and Vredestein brands. The company will continue to sell Apollo, Vredestein and Regal branded tires in Africa. Apollo will focus on creating and strengthening its sales and distribution network across the African continent.
Both companies will also undertake contract manufacturing of their respective brands at each other's facility to have locally manufactured products available for the market.
"It has been a very eventful journey for us in Africa, since our entry in 2006 with the acquisition of Dunlop Tires International," says Apollo Chairman Onkar S Kanwar.
"This has given us a very sound understanding of the growing African market and helped us develop the market for our products in Latin America as well. Using South Africa as the base, we will now focus on brands where we own global rights, which we have already been selling in South Africa for the past few years, for the African and Latin American markets."
The employees retained by Apollo in South Africa will be working for the newly formed company, Apollo Durban (Pty) Ltd.
Apollo says no jobs have been lost in this transaction.
Apollo announced this transaction with Sumitomo on May 29, 2013. For details see "Apollo and Sumitomo strike deal in Africa."
