Conti breaks ground on China plant expansion

ERJ staff report (TB)

Hefei, China -- Continental A.G. has broken ground on a $215 million expansion of its car tyre plant in Hefei that will double the plant's size to 8 million tyres a year by 2015.

Production at the 753,000-sq.-ft. plant started in May 2011 and Conti expects the first phase investment to be producing at a pace of 4 million unts a year by year-end. Employment stands at 680 at the plant, in which Conti invested $260 million.

The expansion to 8 million tyres will require about 620 additional employees, Conti said. Production in the expanded portion of the factory should start in late 2014 or early 2015, the firm said, and ramp up to full capacity over time.

Conti said the site will allow the company to double the size of the plant again to 16 million units a year, the timing of which will depend on market development.

Production at Hefei is focused initially on the ContiComfortContact 5 and ContiMaxContact 5, premium products tailored for the Chinese market, Conti said.

Tobias Kerle, general manager of Continental Tires Hefei, said the decision to expand this plant so soon after it came on stream is “strong proof of the excellence of our Hefei manufacturing team and sets the base to continue our steep growth of Hefei products in the replacement as well as in the original equipment market.”

Conti said this ramp up sets a new benchmark for tyre manufacturing within Continental and will be used as a role model for greenfield activities.

“Asia is one of our key growth markets and our additional investment in our Hefei tyre location is a major step into this direction,” said Burkhardt Koeller, executive vice president controlling for Conti's tyre businesses.

From Tire Business (A Crain publication)