Kaluga chosen as site for Conti’s Russia plant
Detailed information of Continental’s planned new factory in Russia has been released, and this shows that instead of selecting a site in the Ivanovo region as speculated, the new plant will be located in Kaluga, some 170 kilometres southwest of Moscow. In a press statement released July 1, Nikolai Setzer, head of the company’s Passenger and Light Truck Tires division and Continental AG Executive Board member, shared that the Kaluga plant will focus on meeting Continental’s strategic goal of achieving above-average and profitable growth, particularly in emerging markets.
“We shall therefore be investing a total of more than one billion euros over the next four years in order to build up additional passenger tyre capacity,” Setzer reported. “Aspects like its good infrastructure, central geographical location and the good experience Continental has already had with the existing automotive electronics plant were among the special advantages of the new site in Kaluga.” One advantage Continental makes particular note of is that several leading vehicle manufacturers, including Volkswagen, operate manufacturing facilities in Kaluga. The tyre maker has however not specified which OEM customers will be supplied with Kaluga plant output.
The billion euro investment Setzer announced will cover a number of projects, including expanding capacity in Brazil, the US and Europe. Approximately 220 million euros will be invested in the new Kaluga plant alone and production is slated to start at the end of 2013. Employee numbers at the plant, which – as is usual for Continental – will have an output of about four million tyres a year in its first full-capacity phase, are expected to reach around 400 by the end of 2013. Continental also reports that the Russian government has promised to “support the new site,” although it has not expounded on what form this support will take.
“Start of construction is planned for the end of 2011, and, for us, this move represents a very important milestone for our local activities in Russia as well as for our global growth plans,” Setzer added. “Indeed, our plans for Kaluga are such that we shall be able to expand the plant’s annual capacity to eight million passenger tyres when the time comes.” According to Setzer, this new foothold in the Russian market, a region reported to have registered “significant growth” since 2010, is a ‘strategic must’ for Continental; specifically, local production will benefit Conti’s Passenger and Light Truck Tires division by eliminating import duties and reducing transportation costs, thus making the company more competitive in Russia.
Production at the new plant will mainly centre on summer and winter tyres for the Continental, Gislaved, Barum and Matador names, the company’s key corporate brands for the Russian market. New employees will receive and training at other passenger tyre plants, a concept Continental says proved to be highly successful at its Hefei, China factory, which officially commenced production in spring 2011. “This way, we want to ensure that tyres made in Kaluga for the Russian market are built right from the start in accordance with our high production standards that apply throughout the world, and so perform just as well as those made at our established factories,” Setzer elaborated.