Titan evaluating investment in Russian tire maker

Bruce Davis, Tire Business staff

QUINCY, Ill. (June 6, 2013) — Off-road tire specialist Titan International Inc., is negotiating with Russian tire maker JSC Cordiant about a potential investment in Russia.

Titan issued a statement today confirming its interest after news media in Russia reported on the negotiations. In its statement, Titan said it believes the growth of farming and mining worldwide will be in Russia and the neighboring Confederation of Independent States.

Titan said it is working with One Equity Partners (OEP) — the private equity arm of J.P. Morgan Chase & Co. — and Russian Direct Investment Fund (RDIF) — a $10 billion fund established by the Russian government to make equity investments primarily in the Russian economy — in negotiating with Cordiant, the manufacturing venture previously known as OAO Sibur Russian Tyres.

Moscow-based Cordiant has a ownership stake in five Russian tire plants, including JSC Voltair Prom, which makes agricultural and implement tires in Ekaterinburg, in Russia's Sverdlovsk region in the Ural Mountains. It sells farm and OTR tires under the Tyrex brand name.

If an investment is made, Titan said it would be the managing partner, working with RDIF, which brings the expertise to how business is done in Russia and the relationships to deliver "value-creating transactions," and OEP, which brings knowledge of the world of financ

e.

Titan said it plans to grow its tire, wheel and track footprint in Russia and the CIS, where many of Titan's customers, like John Deere, CNH, Agco, Caterpillar, etc. are increasing their presence.

"Titan will be there to service them as well as their end users of equipment with locally produced quality top quality tires," the company said.

Cordiant claims to have more than half of the Russian production capacity for farm tires and about two-thirds of the industrial tire capacity.

It's not clear whether this potential investment is the same one Titan Chairman and CEO Maurice Taylor Jr. mentioned late last year.

At that point, Mr. Taylor said Titan was pursuing the acquisition of a company in the tire industry with roughly $300 million in annual sales. He declined at that point, and in subsequent analysts' briefings, to identify the targeted company, saying only it would "expand our footprint much bigger."