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Apollo and Sumitomo strike deal in Africa

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Apollo Tyres Ltd. is selling some assets while retaining others in Africa as the result of deal with Sumitomo Rubber Industries Ltd.

Sumitomo is taking over almost all operations of Apollo Tyres South Africa (ATSA) division, including the Ladysmith passenger car tire plant. Apollo will retain its Durban plant, which manufactures truck and bus radial and off highway tires used in the mining and construction industries.

“This partnership with Sumitomo is a win-win situation for both organizations,” says Apollo Chairman Onkar S Kanwar. “Sumitomo gets a manufacturing location on the continent and control over the Dunlop brand which they also use in many other countries across the world. Apollo retains one plant in South Africa and has the ability to develop further the markets for its global brands -- Apollo and Vredestein.”

Sumitomo will acquire ATSA, including the Ladysmith plant, for $60 million. Apollo will retain the Durban plant and all employees attached to it. Apollo says no jobs will be lost in transition.

Apollo Tyres will continue to sell the Apollo, Vredestein and Regal brand tyres in Africa while focusing on creating and strengthening its own sales and distribution network across the 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.

Kanwar says, “While we have two global brands -- Apollo and Vredestein -- which we are looking at expanding across the world, we had the brand rights for selling Dunlop brand only in 32 countries of Africa. We have retained the manufacturing facility in Durban, as we would like to increase the presence of Apollo and Vredestein branded tires in Africa, which we have already been selling in South Africa for the past few years.”

Apollo Tyres acquired Durban, South Africa headquartered Dunlop Tyres International (later renamed Apollo Tyres South Africa Pty Ltd) in 2006.

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