LOUSADA, Portugal (June 30, 2016) — Continental A.G. is planning to add capacity for radial agricultural tires at its Continental Mabor Industria de Pneus S.A. plant in Lousada, underscoring its ambitious plans to get back into a tire sector that it exited 12 years ago.
Conti is budgeting $56 million to add capacity for radial agricultural tires at the 70-year-old plant in Lousada, which currently is dedicated to passenger tires. The project will create 125 jobs at the 2.3 million-sq.-ft. plant.
“In view of the growing world population and the increasing need for agricultural crops, the number of large-scale operations and therefore the demand for efficient agricultural tires is increasing,” according to Thorsten Bublitz, business line manager for the agricultural tire business.
Conti said it intends to bring a complete tire portfolio for agricultural tractors and harvesting machines to the market, working with the major vehicle makers in the process. The range will include radial and bias-ply tires in 150 sizes.
Conti also said it is reclaiming the brand rights to the Continental brand for agricultural tires from Mitas, which earlier this year was acquired by Trelleborg A.B.
“Due the recent decision of the cartel authorities regarding the acquisition of Mitas, Continental is reclaiming its brand rights earlier than 2019 as contractually agreed,” Conti said, “and can therefore introduce its agricultural tire portfolio under its premium brand.”
Production of Continental-branded radial agricultural tires in Lousado is planned for start-up in 2017. Conti already produces bias-ply tires for the agricultural sector in Port Elizabeth, South Africa, and Petaling Jaya, Malaysia.
Conti has been involved in the Lousada plant since 1989, when it created a 60-40 joint venture with local manufacturer Mabor Industria. It bought full control of the venture in 1993.
Conti also plans to invest $2.8 million in a new research and development center at Lousado, which will operate in cooperation with the company's central R&D department in Hanover, Germany.
Conti signaled its intention in 2012 to expand its business into the large and OTR mining tire sectors as part of its growth strategy through 2025. At that time it renamed its Industrial Tires business unit "Commercial Specialty Tires" to reflect the change.
Conti said earlier this year it intends to start selling Conti-brand OTR and General-brand farm tires in North America this year.