Michelin is set to make an initial investment of 10 million Euro in a new factory, producing steel cord for tyre reinforcement, situated in Zalau, Romania. The project is expected to take around 10 months to complete. Michelin’s annual turnover in Romania is estimated between 60 and 80 million Euro.
In India, Apollo Tyres has signed a Memorandum of Understanding to set up a tyre manufacturing plant at Vadodara (previously known as Baroda). The project entails an investment of six billion Rupees (112.7 million Euro) but details of product types, capacity etc. are not known.
The Vredestein Investment Consortium (Vico) has increased its shareholding in the Dutch company from 61.2 per cent to 96.8 per cent, following an offer tabled in August, to purchase Vredestein shares for 7.5 Euro. The tender period officially closed on 24th September, by which time Vico has purchased 3,035,594 shares, bringing its holding to 8,265,581 shares. Despite the ending of the tender period, Vico will still buy shares up to 15th October. The listing of Vredestein shares on the official market of Euronext N.V. will be terminated on 24th October.
Daewoo-FSO Motor Polska is to slash up to 1,500 jobs in Poland, in a bid to save the company from bankruptcy and to encourage investment in restructuring. The exact number of jobs to be lost will be decided in discussions with unions, but 1,000 workers picketed a meeting of shareholders at the Economy Ministry.
Federal-Mogul Corporation has advised the U.S. Bankruptcy Court for the District of Delaware that it has approached Citigroup Venture Capital Equity Partners, which has expressed an interest in making an equity investment of 350 million US dollars in the company. CVC has requested that Federal-Mogul agree to an exclusive 90-day negotiating period with CVC and to reimburse CVC for necessary fees and expenses incurred by it in connection with the due diligence review of the company’s business and negotiation of the possible investment.
Chip McClure, Federal-Mogul chief executive officer and president says, “An investment of the type CVC is proposing, if consummated, would create value for the long term by strengthening the balance sheet and enhancing liquidity, while helping ensure that we will continue to deliver innovative products and services to our customers.”
An infusion of new capital will reduce Federal-Mogul’s long-term debt and significantly enhance its liquidity, thus strengthening the company’s ability to compete and succeed in the increasingly competitive global auto parts market.
Hi-Tech Carbon of India is set to double output of carbon black at its factory at Gummipoondi. An investment of Rs 80 crore (US$17.5 million) will see annual production increase to 80,000 tonnes by next March. Half the current production of 40,000 tonnes goes to export.
An article in Asia Times quotes Eric Jugier, chairman of Michelin (China) Investment Co. Ltd., as saying that the company still considers China “an ideal investment destination for the world manufacturing industry”. He is also quoted as saying that Michelin plans to turn its operations in mainland China “into its biggest manufacturing base in the world”.
Avon has been under the ownership of Cooper Tire for several years and under pressure to survive as a stand-alone unit within the company. In today’s climate, where tyre manufacturers are shifting production to low labour cost centres, the continued survival and profitability of Avon is a source of considerable pride in Melksham, home of Avon Tyres, and a puzzle to other manufacturers who struggle to make European plants, in particular UK-based plants, contribute to profits. The task of turning Avon into a net contributor to Cooper Tire was one that required some hard decisions being made. Cooper wanted to add value to the business and took on various issues at Avon. The choices taken meant that people suffered but there was also a lack of resources. The Cooper take-over was not simply a case of cutting costs by laying off staff. There was a tremendous investment in resources and equipment. A great deal of funding was spent on the business, and not just on plant. In all some 60 million pounds has been invested at Melksham. That was six years ago and Cooper Avon is a very different business now, from what it was even two years ago. Ron Shield, managing director at Avon, says, “The first two years were spent putting the business in order. We are now starting to get closer to where we need to be. Last year was our most successful year ever. We are starting to show Cooper that we are a positive contributor to the business.”
The 2 billion Yen investment in production expansion in Yokohama Philippines (T&A website May 2003) is to go ahead after “a perceived improvement in the business climate of the Philippines” according to Takashi Sugimoto, managing director for overseas business. This follows the resolution of a court case involving a dispute between Yokohama and a trade union, decided in favour of the management. The dispute involved the laying off of 70 employees.
Pakistan’s largest tyre manufacturer, General Tyre & Rubber Co. of Pakistan, is to expand annual production by 30 per cent, from one million tyres to 1.3 million, with an investment of 500 million Rupees ($8.65 million). 50 per cent of General’s sales are OE (cars and trucks), 45 per cent replacement and five per cent to the Government. The company also exports tyres with a value of US$700,000, which is expected to rise to US$ 1 million this year. 31 per cent of Pakistan’s tyre demand is met by domestic producers, 53 per cent by imports and the remaining 16 per cent by smuggled truck tyres.
Pirelli has introduced the Diablo Corsa, its latest super sport motorcycle tyre. What makes the tyre unique is that it was produced using MIRS (Modular Integrated Robotized System) technology, with the process being known as MIRS Moto. There is a MIRS Moto line at the factory in Bicocca, near Milan and another at Breuberg in Germany, representing a total investment of more than 10 million Euros. The new Diablo Corsa is OE on the Aprilia RSV 100 R and other homologations are currently under way.
Titan International has reported its 2002 financial results. Turnover for the year was $462.8 million (2001: $457.5 m), while operating results showed a loss of $14.1 million (2001 loss: $33.5 m). The net loss was $35.9 million for the year (2001 loss: 34.8 m) and this figure includes two investment losses, totalling $12.4 million. Titan’s President and CEO Maurice Taylor Jr., pointed to the improvement in operating results as evidence that Titan’s quest to rebound are proving successful and he paid tribute to the company’s workforce for their efforts.
Belshina is seeking investment of 72.2 million dollars from Germany, Slovakia, the Czech Republic and Japan for the completion of three projects to develop new tyre production at Belshina. The Belarussian government has a programme to attract 1.5 billion dollars in place for 2003. This will be allied to a monetary, price and tax reform designed to encourage inward investment.
The industrial tyre sector consists of some very specialised products to suit very specialised vehicles and applications. But it is not all about just supplying products, as the fitting and servicing of industrial tyres is a job for experts, involving considerable investment and commitment. Understandably, the user of industrial equipment wants service immediately – idle machines are losing money – which puts even more pressure on the service provider.
Indian Commerce Minister Arun Shourie has approved 23 foreign direct investment deals, worth 920 million Rupees (US$ 19.1 m). One of these is for Bridgestone to increase its equity holding in its Indian subsidiary from 90 per cent to 100 per cent, with an investment of 666 million Rupees (US$ 13.85 m).
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