Due to the high cost of production, Apollo Tyres Ltd. says it plans to discontinue production at its tire plant in Enschede in the Netherlands.
The company expects to cease production by the summer of 2026, according to information the tiremaker filed with the National Stock Exchange of India.
Apollo acquired the plant in 2009 as part of its acquisition of the Netherlands-based Vredestein Bandan BV. It marked Apollo’s first production site outside of India. (The company now has seven manufacturing plants across Europe and India.) In 2013 the company opened its first global research and development center in the Netherlands.
Apollo says the pending closure and increased expenses are due to “macro-economic disruptions, steep increases in energy and labor costs and a decline in demand for Spacemaster and Agri tires.
“These, together with pricing pressure from low-cost competitors, make the manufacturing at ATNL (Apollo Tyres NL) uncompetitive. Unfortunately, the high cost situation is expected to continue, therefore long-term profitable production at Enschede is not in any way feasible.”
In a news release Benoit Rivallant, president of ATNL, said, “In the last couple of years, we have implemented several initiatives to reduce costs at Enschede. These initiatives resulted in some savings but most of these were completely negated due to the ever-increasing inflation. After thorough investigation we saw no other option than to recommend the discontinuation of the production activities at Enschede….”
Rivallant added, “We will also be in communication with customers, suppliers and other parties across the value chain and will continue to do business as usual. There is no change in our working relationship, and we continue to focus on providing exceptional customer service.”
