MAG Shows Continued Interest in Clairoix Factory

More than a month’s silence over future plans for Continental’s Clairoix factory in France has been broken – a June 10 Reuters report indicates continued interest from the Dubai based Moaffaq Al Gaddah (MAG) Group. The news provider states that MAG plans to purchase the facility and employ around half the current workforce to produce three million tyres per annum.

According to a MAG Group representative, the company submitted a letter of intent to Continental AG on June 9, thereby commencing the due diligence process for acquiring the Clairoix factory. “We have yesterday sent a letter of intent to Continental,” MAG vice-chairman Fawaz Sabri told Reuters. “The objective is to regulate the relationship until we reach a final agreement.”

On May 6, Continental expressed its readiness to hold talks with MAG about a sale of the Clairoix plant; Nikolaï Setzer, head of Conti’s Passenger & Light Truck Tires division, commented at the time that “Continental is showing a real open-mindedness with respect to a potential proposition on the part of MAG.”

MAG has apparently given Continental 14 days to respond. “We intend to get more information and details on the factory to put our business plan together,” Sabri said, adding it was the group’s intention to purchase the plant, its land and equipment. A Continental spokesman confirmed to Reuters it had received the MAG Group letter of intent, commenting “we are still open for negotiations…but there are still a number of open questions.”

After completing a preliminary study, Sabri continued, MAG is planning to produce three million tyres a year, an amount that should require a workforce of around 400 to 500 employees. “It is an estimate,” Sabri added.