ČGS reports growth in all Mitas segments during 2011

In ČGS Holding’s freshly-published 2011 annual report, the Czech Republic-based parent company of tyre maker Mitas a.s. reported its tyre division “successfully continued in its strategy to become a leading global producer of off-road tyres, significantly increased sales and launched major investment projects.”

Sales through Mitas accounted for 76 per cent of the company’s CZK 13.86 billion (£582.69 million) total sales, operating profit of CZK 446.22 million (£13.79 million) and a profit of CZK 448.14 million (£13.85 million). Reporting on Mitas’ performance during the last financial year, the parent company said “in 2011, there was significant growth in the agricultural and industrial tyre segments,” even though “the dramatic rise in the costs of raw materials in the first and second quarters of 2011 squeezed profits, and necessitated an increase in product prices to offset these costs.”

Agricultural tyres

Agricultural tyres, the sector accountable for 69 per cent of all Mitas revenue, saw a “continued growth in sales” that was “spurred on the high prices of agricultural commodities and increased demand from the manufacturers of agricultural machinery for tyres.” Sales volume, ČGS Holding reported, was more than 40 per cent higher than in 2010. “Total annual sales in this segment were historically at their highest level,” the company stated, adding that the trend was most marked in the original equipment segment and was related to high agricultural commodity prices and equipment sales. Sales growth was “not so pronounced” in the replacement market, however despite this the company operated at full production capacity for the entire year.

Industrial tyres

Sales of industrial and construction tyres increased more than 30 per cent year-on-year in 2011, and ČGS Holding expects stable sales to continue this year. Both the OEM and replacement markets are said to be “experiencing rapid growth” and the continued expansion of the Mitas earthmover radial line should contribute to further growth in this sector.

Motorcycle tyres

Compared with 2010, the motorcycle tyre segment enjoyed an increase of 25 per cent.

Europe the ‘most important’ market

Europe accounts for 84.5 per cent of total Mitas sales, so it is no surprise that ČGS Holding refers to the region as its “most important market.” Western Europe alone takes around 58 per cent of sales, while Eastern Europe and the Czech Republic take 14 and 13 per cent respectively. Coming in a distance second in regional sales is North America, the region accounting for 10.8 per cent of Mitas sales, however the company says sales there increased in 2011 through the sales distribution network it established in the US.

In the coming year, ČGS Holding expects sales of Mitas products to grow in the US, CIS, South America and Turkey. “The long-term plan is to build up the image of the MITAS brand in all product segments and to be everywhere where demand for radial tyres is increasing,” the company said. “Aside from Europe and North America, this trend may be expected in Russia, Brazil, other South American countries, and eventually in China as well.”  sg