Conti budgets €40m for expansion of Chinese plant

Shanghai, China – Continental AG plans to invest €40 million this year to complete an expansion of capacity at its tire plant in Hefei, China, to 8 million units annually, Conti Chairman Elmar Degenhart said during a presentation this week at Auto Shanghai 2015.

The investment is part of a €200 million expansion project at the plant that Conti announced in 2012 to double the factory’s annual capacity to 8 million tires and also includes €4.5 million for a test center at the facility.

At the same time, Degenhart disclosed Conti plans to invest some €1 billion in China in the coming five years, essentially matching the firm’s investment there in the past five years.

Part of the investment will be to install solar panels covering about 100,000 square feet on the roof of the 753,000-sq.-ft. plant, Degenhart said. These panels will generate enough energy to produce the equivalent of 1 million tires, he added.

Conti opened the plant in May 2011 after an investment of €240 million. Employment is supposed to rise to nearly 1,300 at the plant once capacity reaches 8 million units, Conti said in 2012.

Conti said the site will allow the company to double the size of the plant again to 16 million units a year.

Degenhart did not elaborate on what activities the test center will be involved in.

At Auto Shanghai 2015, Continental launched the ContiVikingContact 6 winter tire and demonstrated its ContiSeal technology designed to seal punctures automatically in a tire’s tread.

On a broader scale, Degenhart said Conti expects to realize 30 percent of its annual sales by 2020 in Asia, with China being the primary market.

Degenhart stated that Conti already generates 20 percent its sales in Asia – approximately €6.9 billion in 2014 – adding that some 54 percent of the total - €3.7 billion – is achieved in China.