Vredestein may split from Amtel
LONDONDutch tire maker Vredestein Banden may once again become an independent company in the wake of the impending financial collapse of its Russian affiliate, OJSC Amtel-Vredestein.
Amtel-Vredestein has run out of money and cannot repay its creditors, according to a statement posted on the Web site of London Stock Exchange P.L.C. by Amtel-Vredestein N.V. (AVNV), the Dutch holding company for the Amtel and Vredestein entities. AVNV said it will not provide any more funds to the Russian unit.
AVNV's Dutch subsidiary, Vredestein Banden B.V., continues as a growing concern due to separate financing arrangements it has in place.
To ensure the long-term sustainability of Vredestein Banden and provide maximum value to all stakeholders, AVNV is offering to sell Enschede, Netherlands-based Vredestein Banden. Several potential bidders already are conducting due diligence following the submission of preliminary offers.
In connection with this process, both AVNV and Vredestein Banden are in discussions with Vredestein's finance providers, according to the statement.
Although sales discussions are taking place, there is no certainty a sale can be concluded successfully due to a potential conflict of interest in respect to a possible sale, according to the statement.
Vredestein-brand tires are distributed in North America through Vredestein Tyres North America Inc. in Metuchen, N.J.
Nokian to scale back HQ factory
NOKIA, FinlandNokian Tyres P.L.C. has notified workers at its headquarters factory in Nokia it intends to cut about 450 jobs there due to decreased demand for tires.
The cuts would reduce employment at the 104-year-old factory to about 550 and cut output by a quarter to 4.5 million tires next year.
The cuts would coincide with a change in the plant's working schedule to five days a week from continuous operation three shifts a day, seven days a week.
The actions would cut Nokian's annual operating costs at the plant by about $39 million. The plant makes passenger, light truck, farm, OTR and industrial tires.
Michelin to invest in Italy plants
PARISGroup Michelin plans to invest more than $250 million over the next five years to upgrade its tire plants in Italy.
The plan includes phasing out tire production at the Turin/Stura factory by year-end 2009 and increasing capacity at the Cuneo plant, in northwest Italy near the French border, to the point it will become the the largest factory in Europe for premium car tires.
Michelin did not quantify the scope of the expansion, but daily capacity at the 45-year-old plant is listed at 26,000 passenger, light truck and aircraft tires.
While production of passsenger tires will be phased out at Stura, production of semi-finished products will continue at the 36-year-old plant.
It will continue to operate as a logistics center, absorbing capacity from a warehouse in nearby Vercelli that Michelin is closing. Capacity at Stura was listed as 24,000 passenger tires daily.
Michelin pledged to offer a new position to each employee affected by the Stura and Vercelli job cuts and to create the same number of jobs in the local area as will be eliminated.
Ceat building tire plant in India
MUMBAI, IndiaCeat Ltd. has broken ground on a $140 million radial tire plant in India's Gujarat State that eventually will make up to 500 metric tons of passenger, light and medium truck tires a day.
Up to 40 percent of production will be earmarked for export, Ceat said. The plant in Halol, Gujarat, is located about 25 miles from Baroda, close to two large vehicle assembly plants operated by TATA Nano and General Motors Corp.
The plant will be built in three phases, Ceat said. In the first phase, due on stream in June 2010, daily capacity will be around 100 to 150 tons daily and provide employment for 1,000 workers. In subsequent phases, capacity will expand to 500 tons daily.
The Halol site has considerable infrastructure advantages, including natural gas, power and water, as well as a trained labor force, according to Managing Director Paras Chowdhary.
Its proximity to the port of Baroda also will provide benefits for importing raw materials and exporting finished goods, Mr. Chowdhary said.
The plant will be Ceat's third in India. Ceat, the world's No. 29 tire maker in 2007 with $578 million in sales, operates plants in Mumbai and Nasik in Maharashtra State.
Half-year 2008 sales through Sept. 30 of $310 million were 16.8 percent ahead of the 2007 period.
YRC opens China truck tire plant
SUZHOU CITY, ChinaYokohama Rubber Co. Ltd. (YRC) has inaugurated commercial-scale production of steel radial truck and bus tires at its Suzhou Yokohama Tire Co. Ltd. in Suzhou City, Jiangsu Province, more than a year later than originally planned.
The plant, built at a cost of more than $90 million, has a manufacturing capacity of 340,000 tires a year with employment expected to hit 400 at full capacity, YRC said.
The company said it plans to continue ``additional investments to expand the capacity in accordance with future sales growths,'' although it did not disclose details of those plans.
The plant is Yokohama's second factory in China and fourth truck and bus tire unit worldwide. YRC's other tire plant in China is a passenger/light truck tire factory in Hangzhou.
Michelin expanding in Brazil, eyes India
PARISGroup Michelin will expand passenger tire capacity at its plant in Itatiaia, Brazil, and is in ``advanced negotiations'' in India to buy land for a truck and earthmover tire plant.
Michelin did not disclose the scope of or investment in the expansion in Brazil, other than to say it is being undertaken to meet replacement and original equipment demand in Brazil and throughout South America. The 9-year-old Itatiaia plant is rated at 5,000 units a day.
The company did not elaborate on the proposed plant in India.
Pirelli to invest $350m in Romania
BUCHAREST, RomaniaPirelli & C. S.p.A. will invest $350 million over the coming five years in its plants in Romania to increase manufacturing capacity and enhance the firm's competitiveness.
Pirelli did not quantify the scale of the expansion at its 2-year-old Slatina tire plant, which is slated to be on pace to make 5 million passenger tires a year by year-end 2009.
Pirelli also has a steel-cord plant nearby in Slatina and is completing work on a plant in Bumbesti for particulate filters for new automobiles.
Conti buys Finnish tire spikes maker
TIKKAKOSKI, FinlandContinental A.G. has completed its acquisition of Finnish tire spikes manufacturer Tikka Spikes Oy after getting approval from appropriate European antitrust authorities.
Financial terms of the deal, which includes a subsidiary company in St. Petersburg, Russia, were not disclosed. Tikka Spikes will generate about $24 million in sales this year, the companies said, with 120 employees.
``The deal will strengthen Continental's winter tire business as well as its position in Scandinavia and Russia,'' said Lothar Salokat, director of Conti's Korbach, Germany, plant. ``It is our intention that cooperation with other tire manufacturers will continue via Tikka Spikes.''
Japan tire output to fall 9% in '09
TOKYOThe Japan Automobile Tire Manufacturers Association (JATMA) expects tire sales in Japan to fall about 9 percent in 2009 after ending 2008 essentially on par with 2007.
Domestic shipments of tires for four-wheeled vehicles should slide to about 50.5 million units this year from 55.5 million in 2008, JATMA said.
By category, JATMA expects truck and bus tire demand to fall the most, 13.2 percent to 1.1 million units.
Passenger tire demand is expected to slip 8.7 percent to 43.8 million units, and light truck tire shipments are likely to fall 10 percent to 5.7 million units.
The report also shows Japan's tire makers expect to export about 8 percent fewer tires this year, with shipments to North America falling more than 16 percent to 17 million units.
Nokian lowers forecast for '08
NOKIA, FinlandNokian Tyres P.L.C. is cautioning shareholders it likely won't meet its sales and earnings targets for fiscal 2008 because of weaker-than-expected fourth quarter sales.
Demand for tires has decreased in all of Nokian Tyres' core markets due to lower new car sales, a late start of the car winter tire season and the global financial crisis, the company said.
The outlook for 2009 also has weakened, and Nokian said it is taking measures to adjust inventory and production capacity levels in line with demand along with cutting costs and investments significantly to ensure sufficient cash flow.
Nokian earlier had forecast sales would grow as much as 17 percent this year to $1.6 billion, but management is scaling that back to closer to 5 percent, or about $1.45 billion.
Operating income is estimated to be on par with the 2007 figure of $320 million.
Toyo sets up sales subsidiary
OSAKA, JapanToyo Tire & Rubber Co. Ltd. has established a sales subsidiary in Moscow, Toyo Tire Rus L.L.C., to deal with the rapidly growing Russian market.
The venture, set up in a 60/40 partnership with international trading firm Mitsubishi Corp., will work to expand Toyo's brand presence and improve the value of the brand position in the market, Toyo said.
The venture is in line with the international growth goals set forth in Toyo's ``Global GrowthMoving from Challenge to Growth'' medium-term business plan.
Toyo did not comment on its sales expectations for the venture. Masato Kanetsuki is the president of the unit, which is employing six at startup.
This is the second sales company Toyo has set up this past year. Last June it opened a representative office in Madrid, Spain, to deal with customers throughout the Iberian peninsula.
Conti breaks ground in China
HEFEI, ChinaContinental A.G. has broken ground on its newest tire plant, a $253 million passenger and light truck tire factory in Hefei due on stream in 2010.
The first phase of the project will encompass about 753,000 square feet of covered space. Conti said its project represents the largest single direct foreign investment in Anhui Province to date.
The plant will have an annual capacity of 4 million tires initially, rising to more than 10 million in the long term, according to Heinz-Gerhard Wente, a member of Conti's executive board who attended the ground breaking.
Kumho China plant on stream
NANJING, ChinaSouth Korea's Kumho Tire Co. Inc. has inaugurated production of truck tires at its newest plant, a $100 million factory in Nanjing.
The plant came on stream 18 months after Kumho broke ground on the 90,000-sq.-ft. facility in Nanjing, the capital of Jiangsu Province. The plant is Kumho's fourth in China, and the first dedicated to truck tires. The other plants are in Nanjing, Tianjin and Changchun, the latter of which also came on stream last year.
Kumho recently said completion of its first U.S. plant, located in Georgia, has been extended.
Kumho Tire President and CEO Sae-chul Oh attended a ceremony to mark the China plant's official opening. In attendance were about 200 prominent businesspeople and government officials from South Korea and China.
The plant is designed to produce more than 300,000 radial truck and bus tires annually, Kumho said, helping the company compete in a market that is expected to grow between 25 and 30 percent each year.
``Long term business strategies for Kumho Tires in China include reinforcing positive product perception and brand image while enhancing competitiveness in distribution by diversifying sales channels,'' said B.C. Kim, head of Kumho's China subsidiary.
In addition to the four plants, the company established an R&D center in Tianjin in 2006, which includes the latest testing facilities for chemical analysis and performance tests.
Mr. Oh called the plant a ``win-win opportunity for both the city and for us. The city benefits through jobs, economic stimulus and additional infrastructure, and we gain the incredibly dedicated and well-educated workforce that Nanjing offers.''
Pirelli, Russian firm sign JV deal
MOSCOWPirelli & C. S.p.A. has completed a deal with Russian Technologies State Corp. to build a joint venture passenger and truck tire plant in Russia in a project valued at about $430 million.
The agreements signed between the two companies include construction of an industrial complex in Russia's Samara region, where the local government supports the project.
The facility will have initial annual manufacturing capacity of about 4.2 million units. It is due on stream before year-end 2010.
Pirelli signed a further agreement Nov. 6 with joint-venture partner Russian Technologies State Corp. in Moscow during a summit attended by Italian Prime Minister Silvio Berlusconi and Russian Federation President Dmitri Medvedev.