HANOVER, Germany (Sept. 21, 2004) — Continental A.G. has taken a first step toward its long-awaited move into tire manufacturing in China, signing a memorandum of understanding with Qingdao Doublestar Tire Industrial Co. Ltd. of Qingdao, China.
The memorandum covers both companies' intention to establish a tire-manufacturing joint venture in spring 2005. Conti expects to be the majority partner, according to a statement from the company, and the two companies expect to expand tire capacity at Qingdao's existing location and to build a new plant to make passenger and light truck tires.
Conti said it expects the name of the company to be along the lines of “Continental Doublestar Co. Ltd.” Hans-Joachim Nikolin, Conti's board member responsible for the project said, “We have found Doublestar to be a company with a very good position in the market and are confident that an alliance can be created that is profitable for both parties.”
“We are full of confidence about the co-operation with Continental, and we are sure that this will lead to a common success,” said Song Xin, board member of Doublestar Group responsible for the project.
Qingdao Doublestar Tire—previously known as Qingdao Huaqing Tyre Industrial Co. Ltd.—operates an 8-year-old plant in Qingdao with annual capacities of: 1.5 million steel radial truck tires; 2 million bias heavy-duty tires; 2 million agricultural tires; and 4 million inner tubes.
It was ranked 30th in the world in the most recent Tire Business Global Tire Top 75 with sales of more than $220 million. The company forecasts sales growth to more than $800 million by 2006, according to information posted on its Web site.
It is part of Doublestar Group Corp., a trading enterprise with extensive holdings in the shoe and apparel industries.