Amtel Says it Will Sell or Close Soviet-era Plant - Tire Review Magazine

Amtel Says it Will Sell or Close Soviet-era Plant

(Akron/Tire Review) Russian tiremaker Amtel-Vredestein NV said it plans to “sell or otherwise dispose of” its tire plant in Krasnoyarsk, Russia.

The company recently sold its Amtel Carbon operations, based in Volgograd, to Omsk Carbon Black for a reported $21 million.

Amtel-Vredestein said the Krasnoyarsk plant is a Soviet-era facility that primarily produces truck, agricultural and “C” segment tires that do not fit with the company’s strategy of focusing on the production and marketing of high-margin premium and mid-range passenger tires.

Company officials said that its current demand for truck, agricultural and other specialized tires can be met through outsourced production.

The acquisition of Vredestein Banden in 2005 gave Amtel the ability to integrate advanced tire technology. Amtel-Vredestein has spent some $110 million to modernize and expand its other tire plants in Kirov and Voronezh. Company officials said modernization of the aged Krasnoyarsk facility would be far too costly. The disposal of the Krasnoyarsk facility is a “natural progression for the company to move toward ultramodern production methods and shed its Soviet-era legacy,” the company said.

Amtel-Vredestein CEO Alexei Gurin commented: "The disposal of these non-core, unprofitable or loss-producing businesses is consistent with our strategy to expand our position in the premium and value-for-money segments of the passenger tire market and to develop our retail distribution channels. By settling the disposition of these facilities in 2005, the company sets the stage for higher profits in 2006 and beyond.”

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