Tanzania planning for General Tyre revival, minus Continental

Tuesday 26th April 2016 | 0 Comments

 

Prelude to a new era of production or the Tyre Maker Who Cried Wolf? News out of Tanzania suggests that General Tyre East Africa Ltd. (GTEA) may be ready to start making tyres again, something it hasn’t done for close on a decade. And while Tyrepress.com reported on moves to recommence production several years ago and has followed the often bitter negotiations between minority shareholder Continental AG and Tanzania’s government since 2007, this time the decision to restart tyre manufacture lies with one party alone.

The sale of Continental AG’s shareholding in GTEA was finalised on 21 August 2015, with the government of Tanzania acquiring the German tyre maker’s 26 per cent stake in the operation for approximately €900,000. The Tanzanian government now wholly owns GTEA and as early as last September voiced its intention to, through its Ministry of Industries and Trade, revive commercial production at the plant in Arusha.

It has been suggested that work to “revive” the factory could commence as soon as July 2016. According to Tanzania’s Minister of Finance, Phillip Mpango, during the 2016/17 financial year approximately TZS2 billion (£615,000) has been earmarked for upgrades to factory buildings and equipment, the hunt for a suitable investor and other measures needed to bring the plant to a stage where it can begin trial production.

GTEA was founded in 1969 as a joint venture between Tanzania’s government and General Tire in the US. Production started in 1971 and reached a peak output of 1,000 tyres per day. General Tire’s share in the operation was sold to Continental AG in the 1990s. Tyre production ground to a halt in 2007 amidst mounting debts and following the expiry of Continental’s technical assistance contract.

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Category: International News