Ethiopian newspaper Addis Fortune reports the sale of a majority share in the country’s sole tiremaker, Addis Tyre SC. 
According to "reliable sources" that spoke to the English language weekly, Matador AS has sold its 69% share in Addis Tyre to Horizon Plantations Ethiopia Plc. This completed purchase comes more than two years after the deal was announced; Addis Fortune notes that the share transfer was put on hold as the Ethiopian government owns the remaining 31% of shares and, therefore, the country’s Privatisation and Public Enterprises Supervising Agency had right of first refusal on Addis Tyre.
Horizon plantations’ owner Mohammed Ali Al Amoudi is said to have paid $17.9 million cash for the share, concluding the transaction with Matador parent company Continental AG last week. At present Addis Tyre has a reported 17% share of Ethiopia’s tire market – around 150,000 of the almost 900,000 tires sold there annually.
Under Matador’s management, which began in 2004 with the purchase of its 69% stake from the Ethiopian government, the company invested in the introduction of radial tires and developed the potential to increase annual production from 200,000 to 550,000 units. The company’s interest in the Ethiopian factory purportedly changed following Continental’s 51% acquisition of Matador in November 2007.
Horizon general manager and minority shareholder Jemal Ahmed commented to Addis Fortune that Continental wanted Matador to cease production in Africa. “They are no longer interested in the African operation but want to focus in BRIC countries,” Jemal said.
As part of the deal Continental will provide technical assistance for a two-year period. “Continental AG will designate resident technical assistants, and has agreed to train our staff both at the factory site and in Hanover,” Jemal commented.
New management will be introduced to Addis Tyre and Jemal said the plan is to increase marketshare to 36%. The company is currently studying how much it will need to invest in order to boost annual capacity. “This project has a higher value of import substitution, a key objective in the government’s strategic direction,” Jemal stated. “It demands huge investment and long-term commitment.” (Tyres & Accessories)
