HANOVER, Germany — Continental A.G. has sold its passenger tire plant in Kaluga, Russia, to a Russian company, S8 Capital, divesting the majority of its activities in the country in response to Russian's war against Ukraine.
The transaction has been approved by the relevant authorities, according to Conti, which declined to disclose the purchase price.
In addition to tires, the Kaluga plant produced air conditioning and power steering lines, as well as parts for air-suspension systems for the Russian market.
The sale includes a tire distributor in Moscow.
Continental and S8 have agreed that the 1,100 employees will be retained as part of the sales contract.
Continental opened the factory in Kaluga in 2013. In March 2022, the plant halted operations following the breakout of the war, but temporarily resumed production of passenger tires for the local market a month later.
According to Tire Business' 2022 Global Tire Report, the Kaluga plant's capacity is rated at 3 million passenger and light truck tire per year.
Continental said it continues to own shares in the joint venture with Russian company Mettem for the production of tachographs in Chistopol with around 10 employees. The sales process is at an advanced stage, but regulatory approvals are still pending, the company said.
Conti also plans a "controlled withdrawal" of its ContiTech sales offices in Moscow with around 30 employees.
Conti's divestment of its Russian assets is the latest action among tire makers in response to the ongoing war between Russia and Ukraine since Russia invaded its neighbor in February 2022.
In March, Nokian Tyres P.L.C. concluded the sale of its Russian assets, including its tire factory in Vsevolozhsk, to Russian energy and petrochemicals producer P.J.S.C. Tatneft for approximately $307 million.
Group Michelin is working on exit scenarios, including the sale of its car and light truck tire plant in Davydovo, Russia.
The French tire maker suspended all of its industrial operations in Russia and exports to the country in March last year. At the end of June, it disclosed plans to exit Russia due to the "technical impossibility" of resuming operations, in particular due to procurement difficulties.
Michelin Russia employs around 1,000, including 750 at the Davydovo plant, which has a rated production capacity of 1.5 million to 2 million tires a year.
Most of the output from Davydovo consists of mass-market sizes, intended primarily for the Russian market, the company said.
