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Continental Pulling the Plug in Russia

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.

10th December 2004/by Tyrepress Editors

Can Russia Close the Gap Between Itself and Europe?

If we take a look at the current state of Russia’s tyre market, two main features can be identified. Firstly, there is the low-key presence of Western tyre manufacturers when it comes to owning production facilities in the country. With the exceptions of the Michelin owned factory near Moscow, and the plant that Nokian has started building, it appears as if other companies are only just starting to recognise Russia as an interesting market. This supplement to TYRES & ACCESSORIES and NEUE REIFENZEITUNG provides a look at the particular characteristics of the Russian market, introducing the important players and providing an outlook on the future development of this part of the world. Will Russia be able to close the gap between Europe and itself?

9th December 2004/by Tyrepress Editors

Amtel Expands into Europe

Following the news that Amtel was in “detailed discussions” with Vredestein Banden, Amtel president, Sudhir Gupta has confirmed that his company will buy Vredestein Banden and that it is planning initial public offerings (IPO) in London and Moscow in the next two years.

According to Dr Gupta, Amtel is planning a primary listing on the London Stock Exchange followed by a secondary listing on the Russian Stock Exchange. In a conversation with far eastern business publication, Business Times, Dr Gupta explained why the IPO would take place in London and not New York. “Europeans always understand Russia better than the Americans and most of the investment in Russia is European. That’s why we think London is a better place to list.” The secondary listing is also the result of ‘encouragement’ from the authorities for successful companies to list on the Russian Stock Exchange, and because “the stock exchange has good liquidity because of high oil prices.”

The listings are due to take place in one of two time frames; either October to November 2005 or April to May the year after, the Amtel president said. Currently, Dr Gupta owns about 85 per cent of Amtel. An international investment fund managed by Templeton Asset Management Ltd, owns 5.65 per cent, while 10 per cent of Amtel’s shares were recently sold in a private placement for $34.2 million. These shares were bought by about 22 institutional investors in Europe, the US and Russia.

It is clear that a key part of Amtel’s expansion plans will involve venturing outside of Russian borders. One part of this is the company’s purchase of Vredestein Banden. By purchasing the Dutch company, Amtel appears to have been aiming to buy a ready-made foothold in the market. At the moment Vredestein sells 40 per cent its tyres in Europe’s biggest market (Germany) and has well organised distribution operations across Europe.

8th December 2004/by Tyrepress Editors

International Exhibitors at ‘Tires & Rubber 2005’

The plans for next year’s “Tires & Rubber 2005” show in Moscow are currently running at full steam. The exhibition’s organisers expect there to be numerous exhibitors from Russia and abroad, showing their latest product innovations in tyres, wheels and retreading. Apart from domestic tyre manufacturers Sibur, Amtel, Tatneft and Matador-Omskshina many western companies are expected to exhibit and therefore help the show gain an ever more international reputation. The exhibition will be held from 1-4 February 2005, in Moscow’s Expocentr.

26th November 2004/by Tyrepress Editors

Michelin Russia to Treble Production

Jean-Yves Caux, managing director of Michelin’s Russian business has said that the company expects to treble its tyre production capacity by the end of 2005. The expansion plans are due to take place at the company’s Davydovo site, outside Moscow and will increase the plant’s production rate from 2000 to 6000 tyres a day. Speaking to French newspaper La Tribune, Mr Caux said Michelin will invest 18 million euros between 2004 and 2005 on top of the 70 million the company has already invested. The managing director did not rule out further investment in the country. According to the report, Michelin says it will create up to 200 new jobs in order to keep up with demand. The new jobs will be in addition to the company’s existing workforce of 754, of these 650 are presently based at the Davydovo site.

17th November 2004/by Tyrepress Editors

The Russians want Vredestein

Russia’s largest tyre manufacturer, Amtel, wants to take over Vredestein’s tyre unit. The Dutch manufacturer’s CEO, Rob Oudshoorn, confirmed with Tyres & Accessories that “detailed discussions” are well underway and an acquisition could take place in early 2005.

5th November 2004/by Tyrepress Editors

Matador and ATC In Slovak-Ethiopian Joint Venture

July 2004 saw the completion of a joint venture between Slovakian tyre manufacturer Matador and the Addis Tyre Company (ATC) of Ethiopia. The initial discussions began in the year 2000 when Matador management visited Ethiopia to talk about mutual co-operation and technology transfer.

A basic agreement was signed in July 2002 between Matador, ATC and Addis Ababa and Public Enterprise Supervising Authority (PESA) to establish a joint venture with capital inputs for the production and sale of bias ply truck tyres, bias ply light truck and passenger car tyres, plus radial passenger car tyres.

Matador sees the joint venture as an opportunity to develop the Addis factory and at the same time to take advantage of reduced operating costs. The Puchov plant is scheduled to cease production of bias-ply tyres by the end of March next year, which will enable capacity to be increased in passenger and light truck radial and obviate the need for redundancies.

April this year saw the signing of the “Agreement on the Establishment of Matador-ATC Joint Venture for the Production of Tyres” at a ceremony at the Sheraton Hotel in Addis Ababa. Capital holdings in the JV are 61 per cent Matador and 39 per cent ATC. The agreement was signed by Mr Ing Stefan Rosina, president of Matador and Mr Ato Girma Biru, minister of industry and trade for the Ethiopian Federative Democratic Republic (EFDR).

The latest meeting was held in early July to launch production of the tyres and this time Matador was represented by Mr Ing Stefanom Rosinom, chairman of the board of directors of Matador and Doc. Stefan Prekop, general director. The Slovak delegation was received by the President of the EFDR, Mr Girma Wolde-Giorgisa.

President Mr Girma Wolde-Giorgisa said: “Ethiopia is the heart of the African continent and its development and prosperity depends on the increase of the technological level of industry, education, know-how and capital imports from foreign investors. I believe that the successful establishment and functioning of the Matador – ATC joint venture will become an example and a challenge for other foreign companies. I am glad that Matador has established its activities in our country” he concluded.

For Matador, Mr Ing Stefan Rosina said that the company “had found good partners in Ethiopia.” He added: “Conditions of business oriented towards the development of the domestic industry and market are good, but also conditions of export possibilities and the purchase of raw materials. I am convinced that the joint venture will achieve a good standing and importance like our joint venture in Omsk, Russia.”

3rd November 2004/by Tyrepress Editors

Nokian’s New Records

The Finnish tyre manufacturer, Nokian, is reporting new record figures. The company’s turnover increased by 15 per cent to 39.8 million euros in the first nine months of 2004. Operating profit was also on the up and increased by 57 per cent compared with the first nine months of last year to reach 6.2 million euros. Management confirmed that they had significantly outperformed last year’s record results.

1st November 2004/by Tyrepress Editors

Will Continental Withdraw From Russia?

Continental is having “big difficulties in Russia.“ According to German media sources the company’s joint venture with Moscow Tyre Plant (MTP) is both taking longer than envisaged and becoming considerably more expensive. Continental board member, Dr Hans-Joachim Nikolin, has been reported as saying the company is even “seriously” considering the implications of its worst-case scenario, withdrawing from the joint venture.

8th October 2004/by Tyrepress Editors

Amtel Sells $34.2 million Shares

Russian tyre manufacturer, Amtel has sold 10 per cent of its stock in a private placement underwritten and distributed solely by Troika Dialog Group.

7th October 2004/by Tyrepress Editors

‘The fastest clean summer tyre in the world’

Nokian is set to introduce a W speed rated summer car tyre, which it claims is “the fastest clean summer tyre in the world.”

The Nokian Z ultra high performance tyre will initially be launched in the Nordic countries, Central Europe and Russia in the spring of 2005. The company describes the tyre’s characteristics as combining “good wet grip, precise controllability and clean rubber compounds,” and says that it is manufactured without harmful high-aromatic oils.

Mr Teppo Huovila, product development manager, Nokian Tyres explains that the design of the new tyre is focused on two core points: “Safety under extreme conditions and environmental friendliness.” Which he believes calls for the company’s “special technical skills and solid experience.”

20th September 2004/by Tyrepress Editors

Pirelli Supports Russia

Two Pirelli employees based in Burton on Trent have been busy organising a company collection for the victims and families of the Beslan school atrocity. Clare Crighton and Hannah Williams collected in excess of £400.00 in a day. Clare Crighton: “We were extremely touched by everyone’s generosity and how this tragedy has touched everyone”.

13th September 2004/by Tyrepress Editors

Amtel Expand Profits 64 per cent

Amtel Holdings Holland has announced a 64 per cent increase in profits as part of its consolidated results for the 2003 financial year.

30th August 2004/by Tyrepress Editors

Russia Government Considers Lowering Importation Taxes

The Russian government could lower import taxes from 10 per cent to three per cent for the importation of automobile components intended for assembly in Russia, said Mikhaïl Sorokine of the Russian ministry for economic development according to the Itar-Tass agency.

27th August 2004/by Tyrepress Editors

Nokian Announces Record Figures Too

Finnish tyre manufacturer, Nokian, has announced that it increased its turnover to 250.8 million euros (£166 million) in the first half of 2004. Compared with the first half of 2003 this represents a 19 per cent improvement.

6th August 2004/by Tyrepress Editors