Apollo Tyres Picks up Stake in Solar Power Plant
It is not just the power and oil companies that are now thinking of green power. Even traditional industrial companies have taken that route. The latest example is that of one of India’s leading tyre manufacturers, Apollo Tyres, which has gone the solar way. Apollo Tyres has taken a 27.2% stake in CSE Deccan Solar, which is a subsidiary of Cleantech Solar.
The idea of this deal is to get guaranteed and assured supply of 40 million units of solar power annually for its manufacturing facilities. This is meant for the tyre manufacturing plant located at Oragadam near Chennai. The tyre facility of Apollo has the capacity to manufacture 900 tonnes of tyres per day. This tyre facility caters to the passenger vehicles segment as well as to the CV segment.
Apollo Tyres had bought this stake in CSE Deccan Solar for a consideration of Rs.9.30 crore and the supply is expected to commence from July this year. However, there is a specific fact about solar power that should be kept in mind. For example solar power cannot be stored and hence the solar gets produced for only few hours a day.
That is why you would typically find solar energy companies having low capacity utilization and that is due to the unique features of this industry. The expected offtake of power will take care of nearly 20% of the power needs of Apollo Tyres on an annual basis. More importantly, it is a major steep towards a green and sustainable future for Apollo Tyres, which is what corporate are globally shifting towards.
Apollo Tyres will use this solar power to become self sufficient in meeting their power needs for the power needs of critical equipment. Most of the Indian companies, especially in sectors like chemicals and tyres, have a huge carbon footprint. These moves enable the company to reduce the carbon footprint and gradually move towards a zero net carbon situation in the future.
The company has also confirmed that the price is quite economical. In many cases, it has been observed that solar power comes at a much higher cost. The average cost per unit that Apollo Tyres will pay for the solar power will be much lower than their current median power costs. The cost is much below what the company currently pays to the State Electricity Board as its per unit cost.
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