Continental may start supplying tyres made in Kaluga from fall 2014
KALUGA. Jan 25 (Interfax) - Germany's Continental AG plans to launch a car tyre plant in Kaluga in the fall of 2013 and may start supplying tyres from the plant to the Russian market in the second half of 2014, LLC Continental Kaluga CEO Georgy Rotov said.
"Construction is moving a little ahead of schedule. In October 2013 we plan to launch the first phase of the plant. At the same time construction of phase two will begin," he said Thursday at an equipment testing ceremony.
Continental plans to set up full-cycle tyre production in Kaluga using both domestic and foreign produced raw materials. Capacity at the first phase of the plant is estimated to be 4 million tyres per year. Continental hopes to achieve that in 2016, however supplies will begin in the second half of 2014. "This is a kind of record - we plan to achieve this stage [to start supplying products] just a year after launching the plant despite our usual practice in Europe of 2-3 years," Rotov said.
Initially the tyres will be sold in Russia, including to the subsidiaries of European auto manufacturers that are already Continental customers - Volkswagen, PSA Peugeot Citroen and Renault. "We have had our sales company and dealership network in Moscow since 2005. We sold 2.1 million tyres in Russia last year. As sales increase the sales network will grow. In the future - in four to five years - we will start to conquer markets in Belarus, Kazakhstan and other CIS countries," he said.
The company estimates that sales of Continental tyres in Russia amounted to 4% of the market in 2012. With the launch of the first phase of the Kaluga plant that share should increase to 6%-7%, Rotov said.
He confirmed company plans to expand capacity at the Kaluga plant to 8 million tyres per year with the launch of the second phase and then to double production in the future. Bringing capacity to 16 million tyres per year "is something for the very distant future" - 20-25 years after the plant's launch, he said.
Investment in the first phase of the plant was estimated at 240 million euros. Continental AG plans to produce Continental, Gislaved, Barum and Matador brand tyres at the plant. At the same time the company plans to wind down joint production of tyres in Omsk.
Rotov said Continental is looking into production of truck and industrial tyres in Kaluga: "The territory of our plant has all the prerequisites for this."
"Our colleagues from the truck tyre division are working on a business plan to evaluate when the best time will be to start producing them in Russia. When that is approved we can start talking about specific times. It is the same with the industrial tyre division."
Continental's tyre plant in Kaluga is being built on the Rosva industrial park next to PSMA Rus (the joint venture of PSA Peugeot Citroen and Mitsubishi Motors Corporation, MMC) on an area of 60 hectares.