Conti board OKs plans for new US tyre plant

ERJ staff report (TB)

Hannover, Germany -- Continental AG is planning to build a greenfield-site tyre plant in the US, Conti Chairman Elmar Degenhart told shareholders today at the firm's annual meeting in Hanover, but the firm is not disclosing specifics.

Conti's supervisory board approved the investment for the new factory at its meeting this morning prior to the annual meeting, according to a Continental spokeswoman, The plant likely will have capacity for consumer and commercial tyres, she said, although Degenhart's comments focused on the need for passenger and light truck tyre capacity.

“Not least of all,” Degenhart said in a reference to business in the Americas, “we also want to cover rising demand in the NAFTA region, including the large US market, with local production-so there are plans for a new factory there, too.

“Incidentally, these plans are further proof for the depth of the turnaround that the passenger and light truck tirs division has achieved in the Americas region…. Back at the beginning of the new millennium, the passenger and light truck tyre business incurred massive losses in the region,” he said. “Today it is profitable, and, at the same time, a growth area.”

He credited the Americas' management team for the turnaround and said the investments planned “demonstrate that we are convinced of more success.”

Continental´s tyre businesses in North America reported sales of $2.03 billion last year, according to figures in the firm's annual report. This represented growth of 25.8 percent, which Conti said outperformed the market in both the passenger/light truck and commercial vehicle sectors.

Conti has formed a site selection committee, the spokeswoman said, and should decide on a site by the end of the third quarter.

Conti operates two tyre plants in the NAFTA region: in Mount Vernon, Illinois-co-sited with its GTY Tire truck tyre joint venture-and in San Luis Potosi, Mexico.

In Latin America, Conti has tyre plants in Camacari, Brazil, and Cuenca, Ecuador. It is investing $210 million through 2015 to double the size of the Camacari plant to about 9 million car and 700,000 truck tyres. The expanded output will serve both NAFTA and Latin America, according to Renato Sarzano, general manager of Continental Tire in Latin America.

From Tire Business (A Crain publication)