HANNOVER, Germany (Oct. 13, 2003) — Continental A.G. has increased its stake in Sime Darby Berhad's Malaysian tire making units to 51 percent, from 30 percent, for an undisclosed price and announced the venture would be renamed Continental Sime Tyre Sdn. Bhd.
Continental paid $31 million in March for the 30-percent stake, but the parties declined to comment on the price of the additional share acquisition.
The majority holding will enable Conti to “close a gap in its worldwide network of manufacturing operations and to tap the high-growth ASEAN region and Australia,” Conti said.
The Sime Darby business, which encompasses DMIB Berhad and Sime Tyres International Sdn. Bhd., generated sales of about $250 million in fiscal 2002. Together the two plants, in Alor Setar and Petaling Jaya, Malaysia, have annual capacity for 4 million passenger tires, 1 million light truck tires and around 300,000 medium truck tires.
“This gives us a strong manufacturing and distribution base for a market in which over 29 million passenger tires are sold, making it more than twice as large as the Chinese market,” said Manfred Wennemer, Conti's chairman, in a press announcement, referring to the ASEAN (Association of South East Asian Nations) trading area.
Tan Sri Nik Mohamed Yaacob, Sime Darby´s group CEO, added: "This strategic alliance…augurs well for the Sime Darby Tyre Group, which will benefit from Continental's advanced tire technology and further enhance our tire group´s competitiveness in the ASEAN region and other markets.”
Conti will use the Malaysian facilities for export to other Asian markets and to supplement its production capacity in North America and Europe. Among Sime Darby's brand names are Dunlop (Malaysia only), Sumitomo, Simex and Sime Tyres.