Minority Conti Subsidiary Seeks Funds to Revive Fortunes

Tanzanian tyremaker General Tyre East Africa (GTEA) has reported that it requires some US$7.5 million to reverse its fortunes. The company, established in 1969 and co-owned by the Tanzanian government (79 per cent) and Continental AG (21 per cent), held talks with a bank in early May in the hope of securing $2.5 million – money that would go towards assuring the company of a more reliable source of raw materials.

GTEA has also previously sought government intervention in its quest for a $5 million loan to obtain the amount it needs to overcome the difficulties the company has been facing as a result of high production costs, including the costs of fuel and natural rubber imports. The company has proposed that rubber plantations in the regions of Tanga and Morogoro be upgraded to increase output, a move that would, according to GTEA, save an estimated $7 million on rubber imports.

Speaking to local media organisation the EastAfrican, GTEA general manager Deven Lohani said that despite efforts to source raw materials from within Tanzania, GTEA had only able to secure less than one per cent of its requirements from these sources. He added that breathing new life into the country’s plantations would create more than 4,000 jobs and help the tap into a potential $200 million international rubber market.

Tanzania’s Presidential Parastatal Sector Reform Commission, a government body established to facilitate economic reform through privatization, is seeking an investor for the Tanga and Morogoro estates, which were repossessed from an earlier investor who did not meet contract conditions and left without paying a $100,000 wage bill.