By Liz White, ERJ staff
Moscow-Amtel Holdings Holland BV and OOO Amtel Company have jointly mandated the European Bank for Reconstruction and Development to arrange long-term financing.
Russian tyre maker Amtel said the funds will be used to modernise and restructure its manufacturing plants in Russia, to produce higher quality tyres for the CIS market. The project is expected to be signed by the end of 2004.
In an exclusive interview in European Rubber Journal's March edition, Amtel's president and majority owner Sudhir Gupta said the firm will invest $50 million (Euros 39 million) in 2004, plus another $50 million when it finalises plans to build a new tyre plant on a greenfield site.
â€œCooperation with the EBRD will bring significant value to Amtel through the provision of long-term financing for plant modernisation, as well as through further development of our environmental programs,â€ said Alexei Gurion, Amtel's chief financial officer, in a statement on the EBRD finance project. â€œFunds received from EBRD will also be used for financing our greenfield project to produce up to three million premium-class tyres per year.â€
Amtel Group is one of Russia's largest tyre manufacturers. It claims to have a 28-percent share of overall Russian tyre production and a 35-percent share of the car and light truck tyre market.
The group owns three tyre factories in Russia (Kirov, Voronezh and Krasnoyarsk), and one in the Ukraine (Belaya Tserkov). It also owns the Volgograd Carbon Black plant, Amtel-Kuzbass Chemical Fibre plant and Krasnoyarsk Rubber Goods plant.
In 2003, Amtel produced nearly 12 million tyres --an 8.7 percent increase over 2002 production levels. By 2006, Gupta said, the group's ambition is to make over 20 million tyres a year, following its various expansions.
Amtel's preliminary figures for 2003 show total earnings grew 12.1 percent to more than $390 million. The group expects earnings of $470-480 million in 2004, Gupta said.