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June 05, 2015 02:00 AM

Conti to expand China tire plant

Tire Business Staff
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    (Crain News Service photo)
    Conti's Hefei, China, facility is undergoing the third phase of its expansion project.

    HANOVER, Germany (June 5, 2015) — Continental A.G. will invest $280 million over four years at its 4-year-old plant in Hefei, China, to boost capacity 75 percent to 14 million car and light truck tires a year.  

    Conti did not explain its rationale for expanding the Hefei plant at this time, saying only it is part of its long-term “Vision 2025” strategy, which targets a better global balance of R&D, production and sales activities.

    The investment plan follows a $215 million investment since 2012 to raise capacity to 8 million units and also includes a six-fold increase in bicycle tire capacity, to 13 million tires a year by 2025. Employment will more than double to 2,700, Conti said.

    The firm did not say whether this capacity expansion will require expanding the physical size of the 753,000-sq.-ft. factory, which was commissioned in May 2011.

    This latest investment will bring to $560 million the amount budgeted for the Hefei plant, according to Nikolai Setzer, head of Conti's tire division and a member of its executive board. The expansion is in-line with an investment agreement with provincial and local authorities in April, Conti said.

    Earlier this year Conti opened a 64,500-sq.-ft. research and development center for tires at the Hefei tire plant and disclosed plans for an automotive division test center in Jiangsu Province, with operations due to start in about one year's time.

    According to Conti, under Vision 2025, the company aims to deliver annual investments of $390 million in its existing plants, with a further $1.1 billion earmarked for a “special investment program.”

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