In the deal, Amtel-Vredestein will acquire – at least for the next 12 months or so – all the recently modernized tire production facilities and equipment at the plant. Rubber mixing operations there will cease in 2007 due to government environmental concerns. Amtel-Vredestein will ship pre-mixed rubber compound to the plant from its Voronezh tire plant.
Amtel-Vredestein will also assume management control over the entire plant up to December 2007, after which the Moscow government plans to develop the older premises. It is not know what Amtel-Vredestein will do for additional capacity after that point.
The acquisition remains subject to approval by the Russian State Anti-Monopoly Committee.
“By acquiring the Moscow Tyre Plant, we will gain essential production capacity to meet the growing demand for our brands in Russia,” said Alexi Gurin, Amtel-Vredestein CEO. The acquiring company plans to use the facility to manufacture its Amtel and Vredestein brands, which have fallen into short supply due to capacity constraints.
Gurin also said that the company is expanding its Voronezh facility in Russia, but that new capacity will not come on-stream until mid- to late-2007.
As a company, Moscow Tyre Plant is more than 60 years old, and is best known for its Taganka brand. In 2004-05, the company made an investment of some $40 million for new equipment and refurbishments when it formed a joint venture with Continental AG.
When that joint venture was dissolved, Moscow Tyre Plant assumed full control of the modernized facility.
