Apollo closes South Africa tire plant

Gurgaon, India—Apollo Tyres Ltd has closed its truck and OTR tire plant in Durban, South Africa, citing the factory’s uncompetitive cost structure and continuous labor unrest as primary reasons.

Apollo closed the plant, which it had acquired in 2006 in its purchase of Dunlop South Africa, last November as part of a rescue plan the Indian tire maker had proposed last September.

The closing affected 600 workers. Apollo said it budgeted about $13 million to cover costs associated with the closing.

In comments issued along with the firm’s third quarter earnings report, Apollo said it had to secure the best value for all of its stakeholders in its decision to close the plant.

Apollo said it will continue its trading activities in Africa, selling both Apollo- and Vredestein-branded tires throughout the continent.

Apollo’s African business runs primarily through Apollo Tyres South Africa Pty Ltd, headquartered in Durban. The company also has subsidiary companies in Zimbabwe and United Arab Emirates.

The company reported $69.5 million in sales in Africa for the nine months ended Dec. 31, down 62 percent from the year before, which represented the firm’s revenue there before it sold the bulk of its African business to Sumitomo Rubber Industries Ltd.

That deal, for $62 million, included Apollo’s Ladysmith, South Africa, car and light truck tire factory and the rights to the Dunlop brand name for Africa.