Titan International: No further investments in Russian operation

Although Russian tyre maker Voltyre-Prom recently spoke of potential opportunities arising from the war in Ukraine and related international implications, majority shareholder Titan International confirms it will not be investing in this business any time soon. Details of Titan’s relationship with the Russian operation were set out in the US-based firm’s 10-Q financial report for Q1 2022 and further commented on during a teleconference held on 3 May.

In his opening comments, Paul Reitz stated to teleconference participants that “Titan understands the gravity of the crisis in Ukraine” and has “contributed to organisations supporting humanitarian needs.” Possibly pre-empting questions regarding the continued manufacture of agricultural tyres and other products at the Voltyre-Prom plant in Volzhsky, Russia, the Titan International president and chief executive officer added: “We also understand the struggle that millions around the world are facing from escalating food cost and food shortages and we are doing our part in the ag world to help with that troubling situation.”

The 10-Q report elaborates on the subject of food provision and declares that “as the military conflict in Ukraine exacerbates the global food crisis, Titan remains committed to the role it plays in keeping the food and essential goods moving, including its tyre operation in Volgograd, Russia.” According to supplied information, tyres produced in the Voltyre-Prom facility are “primarily sold into Commonwealth Independent States (CIS) countries, located throughout Europe and Asia.”

Full compliance with sanctions

Titan International writes in the 10-Q report that it has “stopped any additional investments into this joint project.” The tyre maker further emphasises that neither the Voltyre-Prom operation, which is “operating at lower levels in full compliance with all international sanctions on Russia,” nor any other Titan business sells any products to the Russian military or other government agencies.

The company adds that the potential impact of bans, sanction programmes, and boycotts on its business is “uncertain at the current time” due to the “fluid nature of the military conflict as it is unfolding.” It identifies a number of potential complications, including supply chain and logistics disruptions, financial impacts, volatility in foreign exchange and interest rates, inflationary pressures on raw materials and energy, loss of operational control and/or assets, heightened cybersecurity threats and other restrictions.

Titan & Voltyre-Prom

Titan International currently owns 64.3 per cent of Voltyre-Prom; this ownership represented approximately six per cent of the company’s consolidated assets as of 31 March 2022. Operations in Russia contributed only around five per cent to Titan’s consolidated global sales in the first quarters of both 2021 and 2022, and the company thus says the impact of the military conflict between Russia and Ukraine has “not had a significant impact” on its global operations.