HANOVER, Germany (Oct. 5, 2004) — Continental A.G. has broken ground for its $260 million tire plant complex in Camacari, Brazil, that will supply tires primarily to North America.
The 1.1 million-sq.-ft. plant, in the state of Bahia, should begin production of passenger and light truck tires by early 2007, after which Conti plans to add a second plant at the site for truck tires. The passenger/light truck tire plant should employ 1,000 at start-up. Annual capacity eventually will be 6 million units.
"By building the plant in Bahia,…we are being consistent with our strategy of further expanding production at low-cost locations," said Martien de Louw, member of Conti's executive board responsible for passenger and light truck tires.
"The new capacities with low-cost production play a major role in our turnaround concept for the passenger tire business in the NAFTA region, which has up to now been running at a loss. At the same time, the capacities permit profitable growth," Mr. de Louw said.
The project is part of a $305 million, four-year plan to increase global tire capacity by 7 million passenger and 700,000 truck tires. The company also is expanding its Continental Sime Tyre operations in Malaysia and more recently signed a memorandum of understanding with China's Qingdao Doublestar Tire Industrial Co. Ltd, covering both companies´ intention to found a joint venture by next spring.