27 Jan 2006
Amsterdam, the Netherlands - Amtel-Vredestein NV has sold its Krasnoyarsk tyre complex to a Russian company, Vostokshinainvest. The company previously disclosed its intent to dispose of the facility in an announcement on 22 December 2005.
A-V said the Krasnoyarsk plant is a Soviet-era facility that primarily produces truck, agricultural and C†segment tyres which do not fit the company's current strategy of focusing on the production and marketing of high-margin A- and B-segment tyres used, respectively, on premium and mid-range passenger vehicles.
According to AV management, the Krasnoyarsk tyre facility is loss-producing and the investment required to modernise it would be prohibitive. Current demand for Amtel-Vredestein's truck, agricultural and other specialised tyres can be met through outsourced production.
While the disposal will result in a substantial non-cash adjustment for 2005, said A-V, it is not expected to have any negative impact on Amtel-Vredestein's sales in 2006 and is estimated to improve operating profit margins.
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