Benecke-Kaliko AG has signed a joint venture agreement with Jiangsu Changshun International Trading Co in order to “expand production capacities considerably.” Approximately 10 million euros will be invested in a production site in the provincial town of Zhangjiagang City, 120 kilometres north west of Shanghai. The factory will produce PVC expanded sheeting and PVC leatherette for the Chinese automotive industry from mid 2006, creating 170 jobs
Pirelli’s Brazilian subsidiary of its Telecom systems business has signed a joint venture agreement with Japan’s Furukawa Industrial, to produce fibre optic cables in Brazil. The new company, to be called SPF (Sociedade Produtora de Fibras Ópticas S.A) is split 51:49 with Pirelli responsible for the majority. The decision to merge was taken in order to “catch all the opportunities that could derive from the recovery of the Brazilian telecommunications market after last year’s slowdown,” a company statement explained.
The $100 million joint venture tyre between India’s Apollo Tyres and Groupe Michelin will begin in early 2006, according to the operation’s chairman and managing director. Onkar Kanwar said construction work on the radial medium truck and bus tyre plant, in Pune, India, has started and should be operational in the first quarter of next year, Tire Review reported, citing wire reports.
Continental AG has founded its own distribution company for the Russian market, the Prime-Tass news agency has reported. The news comes after Continental “pulled the plug” on a failed joint venture with Moscow Tyre Plant last December.
Lion Rubber Industries, a subsidiary of Silverstone Corporation, is proposing to sell its entire 55 per cent stake in Dong Feng Lion Tyre Co Ltd (DFLT) to Dong Feng Tyre Group (DF Tyre) in a deal valued at roughly £31.32 million. The Edge news service has also reported that the company terminated an earlier proposal to sell 10 per cent of DFLT to Beijing Jing Cheng Zhanye Bio-Technology Co Ltd.
The deal will reportedly help DF Tyre settle an inter-company loan and finance its plans to push internationally. Lion Group only recently orchestrated a joint venture agreement with China’s Shandong LuHe Group Co Ltd to make Silverstone-brand tyres in China for the Chinese market.
Degussa has begun plans for a fourth production line at its carbon black plant in Qingdao, even though its third line is still under construction. The German company will significantly increase its manufacturing capacity in China with the new investment.
“After completion of our current expansion projects we will be able to produce more than 100,000 metric tons of carbon black,” said Robert Wissner, head of Degussa’s Fillers & Pigments Business Unit.
Michelin has resumed production at its joint venture in Shanghai after halting operations to “clear its stock of unsold tyres,” reports news source Bloomberg.
The announcement follows several reports last week that stated the tyre factory would suspend production for months to come following a slowdown in sales in the Chinese market.
Production at Michelin’s Shanghai joint venture has been suspended for the past month following a “drastic slowdown in sales in the Chinese car market,” reports the South China Morning Post.
According to an unnamed source at Shanghai Tyre and Rubber, which owns 30 per cent of Shanghai Michelin Warrior Tyre, the production is likely to be halted for another one to two months, because of “continuing hard times.” The venture has yet to record a profit since its establishment in 2001.
Continental AG (Hanover) is fulfilling its commitment to the EU Commission to turn over to competitors parts of Phoenix AG, which it has taken over. Freudenberg & Co. (Weinheim/Germany) is taking over the Phoenix AG’s holding in Vibracoustic, previously a joint venture, thus becoming the sole owner. Freudenberg is also purchasing Phoenix AG’s commercial vehicle air spring OEM/OES business.
Malaysian news sources are reporting that Lion Forest Industries Bhd is teaming up with Chinese tyre manufacturer Shandong LuHe Group Co Ltd to form a 75:25 joint venture company to produce Silverstone tyres in China. On 15 December the two companies said that Lion Forest’s subsidiary, Lion Rubber Industries Sdn Bhd, had signed an agreement with Shandong LuHe to form the joint venture company with paid-up capital of 152 million ringgit (approximately £21 million).
Lion Forest’s newly acquired subsidiary Quay Class Ltd and Lion Rubber also entered into an agreement with Silverstone Bhd’s 100 per cent subsidiary, iMpression Worldwide Inc, for the provision of technical know-how and services and the use of the Silverstone brand name. Silverstone Bhd is a wholly owned subsidiary of Silverstone Corporation Bhd.
According to German media reports Continental is retreating from its commitment in Russia. All rescue attempts have failed, said chairman Manfred Wennemer in an interview with the Frankfurter Allgemeine newspaper: “We did not succeed in finding solutions, that would allow for a prosperous business in the long run.“ Therefore Continental is pulling the plug in Russia. Wennemer continues: “We have agreed with our Russia partner [Moscow Tyre Plant] that we are going to retreat from the joint venture. We are selling our shares of the joint company to MTP and thus ending our excursion in the country.” The retreat from Russia will cost around 30 million euros (£20.7 million), says chairman Wennemer. A part of the cost has already been reported as part of the company’s third quarter expenses. In spite of the Russian upheaval, the automotive supplier and tyre manufacturer is sticking to its positive financial outlook for this year.
Pirelli’s real estate business unit, UniCredito Italiano SpA and Morgan Stanley have founded a real estate joint venture. The partnership will manage real estate with a total value of more than a billion euros, UniCredito said on Friday. UniCredito will sell real estate worth 300 million euros to the joint venture, while Pirelli and Morgan Stanley will transfer 750 million euros of assets to the joint venture. Together the two companies will control 85 per cent of the shares. UniCredito will hold the remaining 15 per cent.
Continental expects a decision regarding its joint venture with the Moscow Tyre Plant to be made by the end of the month, a company spokesman told a press conference in Hanover. The conference also saw the company present its latest Transportation Analysis. Negotiations on the future of the business enterprise are on going and an official decision has not yet been taken, reports Continental. Continental says a decision on whether or not to go ahead with its plans will be made by the end of this year.
Contental’s Malaysian joint venture partner, Sime Tyres, reports that it is on track to achieve 10 per cent increase in sales on the back of higher domestic and international demand, according to chief executive officer Mohd Shukri Baharom. Folowing the strong results, the company is expected to increase tyre production to 5.5 million this year, with exports projected to grow by 40 per cent.
In a move designed to further boost sales, the company says it will explore the regional market under the Asean Free Trade Area (Afta). “Afta will allow us to expand further,” Mr Shukri told journalists at a Simex 4×4 International Rainforest Challenge (RFC) 2004 briefing in Petaling Jaya yesterday.
The EU Commission has given Continental the okay for its proposed takeover of Phoenix. “Therefore, there is nothing in the way of a merger of these two historic German companies anymore and we will find ourselves well positioned to deal with the worldwide competition,“ said Continental executive board chairman, Manfred Wennemer.
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