Continental Tyre South Africa (CTSA) will invest a three-figure sum – more than R100-million – in its local tyre manufacturing plant in Port Elizabeth in 2014, says CTSA MD Dieter Horni.
Horni is unwilling to disclose the full investment figure in the local arm of the German tyre and parts manufacturer.
The investments at the 90 000m2 New Brighton West plant will focus on increasing 4x4 tyre production capacity, run-flat tyre production capacity, as well as speciality tyre production.
Speciality tyres are typically larger in size, and are used on agricultural and capital equipment.
The investment at CTSA will also see the installation of a new boiler, which will be more energy efficient, says finance and information technology GM Darwin Zabala.
“We have been here [in South Africa] for 50 years, and we plan to be here for the next 50 years.”
CTSA invested four times its average yearly investment in 2013, increasing this to seven times in 2014.
The 2014 investment will see CTSA grow passenger car, 4x4, light truck and light commercial vehicle tyre production to 3.6-million tyres a year, up from the around 3.2-million produced in 2010.
CTSA operates seven days a week at its plant, and supplies all seven vehicle manufacturers in South Africa.
The 2014 investment will also boost speciality tyre production, with CTSA aiming to become a speciality tyre hub, especially for underground mining equipment.
CTSA marketing and sales GM Shaun Uys says speciality tyre production is already around 25 t to 26 a day, up from 2010’s 14 t to 15 t a day.
A speciality tyre can easily weigh around 1.1 t to 1.2 t.
“We could do up to 25 inch [rim diameter], but can now go up to 33-inch tyres too,” says Uys.
Any tyre with a 15 inch rim diameter and upwards is typically a speciality tyre.
Underground mining equipment uses 25-inch tyres.
Upgrading the capacity at the Port Elizabeth plant, however, means CTSA can now also supply certain above-ground earthmoving equipments with tyres.
Uys says CTSA believes its plant is unique and that it can “harness the technology and local competence” it already has to produce more speciality tyres.
However, the plant is and will remain “a low-seam underground tyre specialist”.
Up to now, CTSA has only done ad hoc exports of speciality tyres, notes Horni.
Current exports into Africa, with its many mine sites, will now be expanded to markets such as Russia, Australia and Latin America in 2014 and 2015.
Horni says the expansion has been made possible by a mind-set change at Continental AG’s head office in Hannover, Germany, regarding the market potential these tyres hold.