CGS Outlines Rumaguma Plant’s Role in Radial Capacity Expansion

Following the announced acquisition of the Rumaguma tyre manufacturing facility in Serbia formerly owned by GPX International, the CGS Group has disclosed it intends in time to use the facility as a basis for the further development of the company’s European radial capacities. The Czech Republic based manufacturer will integrate the Rumaguma plant industrial and agricultural tyre plant into its tyre division operated by MITAS a.s. The acquisition is, says CGS, part of the group’s strategy of focusing upon the agricultural and industrial tyres business, and will further support its second position in the European agricultural tyres segment.

The integration of Rumaguma into the CGS Group is expected to be finalised in the second half of September 2008, pending approval of the deal by the Serbian trust authorities. Rumaguma will then become the fourth MITAS a.s. tyre plant, will significantly increase overall capacities and support optimisation of production programs between the plants. MITAS a.s. is currently undertaking a sizeable investment programme, with the aim of enlarge its radial capacities in its Czech Republic plants. The addition of Rumaguma will enable CGS to do so without sacrificing its position in the still important agricultural and industrial cross ply markets. Rumaguma will then, after a necessary facility upgrade to MITAS a.s. technical level, serve as a basis for further radial capacity development. The company comments that current cost structures in Serbia make production at Rumaguma an important advantage for the group.