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New Delhi, July 29 (PTI) Apollo Tyres today reported a flat consolidated net profit at Rs 74.20 crore for the quarter ended June 30, bogged down by high raw material prices and losses from the locked-out Perambra unit in Kerala. The company had posted a net profit of Rs 73.82 crore in the corresponding period last year. The total income during the first quarter increased by 11.35 per cent to Rs 1,820.69 crore from Rs 1,635.12 crore in the year-ago period. "There was severe raw material cost push during the quarter and it became very difficult to maintain the profitability," Apollo Tyres Managing Director Neeraj Kanwar told PTI. The company''s spending on raw materials increased by 38 per cent during the quarter on account of high natural rubber prices. It requires 10,000 tonnes of natural rubber a month. He said the company is importing 15-20 per cent of its natural rubber requirement as the prices in international markets are cheaper by Rs 30-40 per tonne. Besides, the company has incurred about Rs 300 crore revenue loss due to continued lock-out at its Perambra unit, which is facing labour unrest since April, Kanwar said. "We are engaged in the negotiations and hopeful of starting the production again in August," he said, adding in terms of actual profit, the company has suffered Rs 30 crore. Workers at the facility had resorted to a go-slow agitation in April asking better wages. The company suspended 33 employees and declared lock-out at the factory on June 11 after failing to reach an agreement with the workers. On the current raw material prices, Kanwar said: "It is continuously increasing and the government is not doing anything. In last quarter, we raised the prices by 7-8 per cent. We have hiked it further by 3 per cent in July and we will have to do it again if the situation remains like this." He, however, declined to share any timeline when the company will hike the prices or what could be quantum of hike. Speaking about its expansion plans, Kanwar said Apollo Tyres is enhancing the capacity of Vredestein to 6 million passenger car tyres a year from 5.1 million tyres at an investment of 6.6 million Euro (about Rs 40 crore). The company will also put in USD 30 million for expansion and equipment upgradation in the Durban and Ladysmith plants. On the domestic front, Apollo Tyres expanding the capacity of its newly-built Chennai facility to 8,000 units per day, from the current 3,000. "We are putting in a further Rs 300 crore to the existing Rs 2000 crore, taking the total to Rs 2,300 crore. About 50 per cent has been pumped in and the rest will be done in this fiscal," Kanwar said.
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