Nokian gets loan for Russian plant
LONDON-Nokian Tyres P.L.C. has negotiated a nine-year, $62 million loan with the European Bank for Reconstruction and Development (EBRD) and a syndicate of international banks to help it finance the construction of its plant near St. Petersburg, Russia.
Nokian earlier had disclosed a budget of $63.5 million for the factory in Vsevolozhsk, Russia, which it expects will be producing tires in 2006. The 226,000-sq.-ft. plant should produce 1.5 million passenger tires in its first full year of production and grow steadily to 4 million units annually. Capacity will be expanded gradually, reaching 8 million units by 2016, Nokian said.
The plant will make Nokian-branded passenger car tires, which will be sold primarily in the growing Russian market. In the initial phase, the facility will employ about 200, most of whom will be Russian.
Four commercial banks are participating in the syndicate, taking $7.75 million each under an EBRD A/B-loan structure where EBRD remains the lender of record. The banks are Danske Bank A/S and HSH Nordbank A.G. of Denmark; Raiffeisen Zentralbank Ã–sterreich A.G. of Austria; and the Helsinki, Finland, branch of Calyon Bank, which is part of France's Credit Agricole Group.
The EBRD was established in 1991 when communism was crumbling in central and eastern Europe and ex-Soviet countries needed support to nurture a new private sector. It uses investment tools to help build market economies and democracies in 27 countries from central Europe to central Asia.
Conti forms JV with Chinese firm
HANOVER, Germany-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, who is 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.
Bridgestone starts up Wuxi, China, plant
SHANGHAI-Bridgestone Corp. has inaugurated production at its radial passenger tire plant in Wuxi, Jiangsu, China, and disclosed plans to build a steel tire cord plant in Shenyang, China, for making steel tire cord to support its growing tire production capacity there.
The Wuxi plant, operated by Bridgestone (Wuxi) Tire Co. Ltd., represents an investment of $99 million and is Bridgestone's third in China, but the first wholly owned. Its other two plants, for passenger radials in Tianjin and truck and bus radials in Shenyang, were acquired.
The new plant, covering 473,400 square feet and employing 590, will turn out 8,000 tires a day initially, the company said. It went on stream just 18 months after construction started. Wuxi is about 75 miles west of Shanghai.
The company held an opening ceremony Sept. 24 with Shigeo Watanabe, Bridgestone chairman, CEO and president, and other Bridgestone executives and local dignitaries in attendance.
In Shenyang, Bridgestone will invest $94.3 million over 12 months to build the steel tire cord plant. Bridgestone (Shenyang) Steel Cord Co. will operate the new plant, which should start production in October 2005. The plant should reach its designated daily capacity of 70 metric tons by year-end 2007, the company said, with 260 employees.
The new plant, designed to make cord for radial truck tires, will be Bridgestone's sixth steel cord plant, operating alongside plants in Kuroiso and Saga, Japan, Clarksville, Tenn., Cagliari, Italy and Rayong, Thailand. It will dedicate most of its output to Bridgestone's nearby truck tire plant, Bridgestone (Shenyang) Tire Co. Ltd.
Conti puts Russian venture on hold
HANOVER, Germany-Continental A.G. has put its Russian tire joint venture with Moscow Tire on hold for the forseeable future due to a series of delays and problems.
The latest delay concerns a comment from Russian government officials that appears to question the future of large-scale industrial operations in residential areas, notably in Moscow. Conti and Moscow Tire signed their joint venture letter of intent in September 2002.
A spokesman for Continental said although there have been many delays in the project for a variety of reasons, each of them could have been overcome separately.
The latest pronouncement from state authorities, however, appears to contradict assurances of continued long-term production given by the local Moscow authorities. It is this contradiction that has caused Conti to freeze all further activity on the project until these questions have been resolved, the spokesman said.
As a consequence, Conti is engaged in serious discussions with its joint venture partner over the future of the operations at Moscow Tire.
The spokesman said the risk is relatively limited. The maximum risk Conti is exposed to over this project is less than $12 million, the spokesman said. This would have no significant effect on Conti's financial figures, he added.
Michelin eyes Polish expansion
PARIS-Group Michelin has acquired an option on real estate adjacent to its Stomil-Olsztyn S.A. tire plant in Olsztyn, Poland, fueling speculation the tire maker is planning to add capacity to the plant or build an entirely new plant there.
Michelin indicated recently that it has budgeted more than $275 million for some type of project in Poland and/or Hungary. A Michelin spokeswoman declined to comment specifically on the company's intentions for the acquired land.
Media reports in Poland and Hungary said Michelin was in negotiations with government officials in both countries about locating a new tire plant there. Polish media reported Olsztyn city officials had made legal provisions to facilitate the implementation of a project.
Michelin owns nearly 99 percent of the stock in Stomil-Olsztyn, having boosted it from about 70 percent in May 2003 with a $95 million purchase of shares from local shareholders.
Michelin also has budgeted more than $60 million for expansion capacity in Romania this year and next.