ContiTech is spending EUR13m (US$16.8m) on a new plant for air conditioning and power steering lines in Kaluga, Russia, a city also home to automaking joint ventures including Renault-Nissan-AvtoVAZ and Volkswagen.
Plant construction will begin next February with production starting in December.
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“Following our acquisition of US-based Parker Hannifin Corporation’s automotive air conditioning pipes operations, this investment will help us to further expand our global presence and broaden our customer base,” said ContiTech’s Matthias Schönberg.
“The Russian automotive market is one of the strongest-growing markets in the world. This new factory will help our air conditioning and power steering and chassis control segments to gain a foothold in this strategically important market.”
ContiTech is “following” customer Renault-Nissan, which holds a majority stake in Russian automaker AvtoVAZ.
The new plant will be built on the 60-hectare site where a Continental tyre plant is currently being established. The fluid pipe production hall will be 4,800 m2 and an administration building will also be built. Workforce is expected to be 160 people by 2015 and the first employees are already being trained in Germany.
The plant will initially supply air-conditioning and power steering lines for Renault/Dacia and power steering lines for AvtoVAZ (Lada). All future products for Russia will be made locally as customers are nearby.
With a population of 350,000, Kaluga is a Russian automotive industry hub about 170km southeast of Moscow and midway between the other automotive regions of St Petersburg, Moscow and Togliatti. PSA/Citroën and Volvo Trucks also have vehicle factories in the region.
With sales of around EUR1.3bn and 14,000 employees, fluid technology is the largest business unit within ContiTech which booked sales of around EUR3.6bn in 2011 and employs 29,000.
