Titan managing partner in Cordiant deal
A consortium made up of US tyre maker Titan International, Russian government fund the Russian Direct Investment Fund (RDIF), and private equity fund One Equity Partners (OEP) have reached an agreement in principle with Russian tyre holding Cordiant to invest in Russian agricultural and industrial tyre manufacturer Voltyre-Prom. The consortium will own a controlling stake in Voltyre-Prom, with Titan International becoming its managing partner.
Last year, Voltyre-Prom held a 43 per cent market share in Russia’s agricultural tyre sector and 16 per cent in industrial tyres. The company produced around 1.35 million tyres during the year. According to RDIF, the consortium’s investment will allow Voltyre-Prom to update its operations, expand its production of specialty tyres for international agricultural machinery and reduce imports by shifting production to Russia. The tyre maker will also “begin to explore export opportunities,”
“Titan has plans to grow its tyre, wheel and track footprint in Russia and CIS countries,” commented Titan International chairman and CEO Maurice Taylor. “John Deere, CNH, Agco and Caterpillar are just a few of Titan’s customers increasing their presence in Russia and CIS, and Titan will be there to service them and end users of their equipment as this expansion occurs. It is Titan’s belief that the future growth of global farming and mining lies in Russia and CIS countries.”
“RDIF completed this deal alongside world class strategic partners from both the global industrial and financial sectors,” said RDIF CEO Kirill Dmitriev. “The involvement of investors of such scale underlines the growth prospects in the Russian agricultural sector. The expertise and knowledge of our partners will help shift the production of world-class tyres that currently takes place overseas to Russia. This investment meets the fund’s objectives and represents an exciting opportunity to get a foothold in this sector.”
“OEP and Titan welcome the opportunity to invest with RDIF to support the growth and development of Voltyre,” added Dick Cashin, managing partner of One Equity Partners. “RDIF has been an exemplary partner throughout the transaction. We are confident that we have the optimal strategy in place to share capabilities, maximise the strength of Titan’s brands, support Titan’s demanding international customers, and work with the very capable management and workforce at Voltyre.”
Dmitry Sokov, CEO of Cordiant, commented: “The agreement with the consortium will enable Cordiant to focus on passenger and truck tyre markets. The deal also includes a three-year distribution partnership program, with Cordiant selling Voltyre’s passenger, truck and light truck tyres. Cordiant plans to invest almost US$550 million up to the end of 2018 to expand its passenger and truck tyre business. This will increase production capacity by up to 12 million tyres per year.”
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