Czech tire maker CGS A.S. is considering opening an agricultural tire plant in Charles City, a project that would involve an investment of about $44.5 million and create 192 jobs, according to information in a resolution passed recently by the city council in Charles City.
A CGS spokesman in Prague, Czech Republic, confirmed the company's interest but said nothing is definite as yet. CGSwhich also operates as Mitas A.S.would take over an idled Winnebago Inc. assembly plant in Charles City and convert it to tire production, according to the resolution.
A press release on CGS Tyres' website said the company is currently in discussions to open a tire production plant in Charles City and, on Aug. 31, is expected to sign investment and incentive agreements at the Farm Progress Show in Boone (Iowa).
Jaroslav Cechura, CEO of Mitas, said in the website statement that Iowa is central to our North American strategy. We are expanding our production capacity, and we will provide the U.S. farmers with U.S.-made Mitas and Continental tires.
CGS is among the world's 50 largest tire makers, with 2009 sales of $318 million, all from farm, forestry and related industrial tires. It employs more than 2,800 and operates three tire plants in Czech Republic and one in Serbia. Besides its own Mitas brand, CGS owns the rights to the Continental brand for agricultural tires.
It is represented in North America by its sales subsidiary CGS Tires U.S. Inc. in Charlotte, N.C. Calls to that office were not returned at Tire Business presstime.
CGS's plan to use the empty Winnebago plant would proceed in three phases, according to the Charles City resolution:
* Conversion to tire manufacturing, including installation of production machinery and building an energy center;
* Production start-up and expansion of warehouse capacity; and
* Building a mixing room.
The jobs to be created would pay an average of $29,578 a year, the council resolution states.
To support the project, Charles City is applying to the Iowa Department of Economic Development for $924,000 in funding from the state's Grow Iowa Values Fund. The funds would be used to overcome locational disadvantage factors, according to the resolution.
CGS said on its website that details of the projectincluding total sum invested, number of jobs created locally or the average starting wageare subject to agreements with the Iowa Department of Economic Development, Charles City Area Development Corp., City of Charles City and Floyd County. The negotiations will conclude in August 2010.
The city resolution did not specify a timetable for the project, but the CGS website acknowledged the company plans to expand the plant in three stages with production to start in January 2012.
CGS's holdings also include Rubena industrial rubber products and Buzuluk rubber processing machinery. CGS stands for CeskÃ¡ GumÃ¡renskÃ¡ Spolenost.
David Shaw, Crain News Service, contributed to the report.