Continental Tyres Russia

Location:

Russia

Project number:

42301

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Target board date:

24 Jul 2012

Status:

Repaying

PSD disclosed:

20 Jun 2012

Project Description

The construction, equipment and putting into operation of the tyre manufacturing plant located in the Kaluga region, with the nominal annual capacity of 4 million units to be achieved in 2017.

The project is aimed at addressing the growing opportunities in the auto market in Russia and will mainly focus on production of tyres under different brand names of the Continental AG group for the passenger cars and light trucks segment.

Transition Impact

The main transition impact potential derives from:

  • Expansion of competitive market interactions with other sectors through the development of the domestic suppliers of raw materials;
  • Setting of standards for corporate governance and business conduct through introduction of integrated resource management tools representing best practice internationally and innovative in the Russian context;
  • Enhancing of frameworks for markets through contribution to the adoption and implementation of the regulations relating to the use of waste tyres.

The Client

OOO Continental Kaluga, a Russian subsidiary of Continental AG, one of the global leading automotive suppliers of electronic systems and components, tyres and non-tyre rubber products.

EBRD Finance

The EBRD is considering a term loan of up to EUR 90 million to be provided in roubles.

Project Cost

Total project costs are estimated at EUR 320 million.

Environmental Impact

The project is categorised as B (2008). Potential adverse environmental and social impacts associated with the project are site specific and have been readily identified during due diligence and addressed through mitigation measures agreed with the Company. The Bank’s due diligence included a corporate environmental, health and safety and social (EHSS) audit of the Company’s current operations and an environmental and social analysis of the investment plans. The audit assessed the Company’s corporate EHSS policies and procedures, environmental management systems and overall capacity to implement the Bank’s Performance Requirements (PRs). The due diligence included site visits to the location of the planned facilities near Kaluga and discussions with local and corporate management.

The due diligence identified that Continental AG operates effective corporate risk management systems in regard to environmental and health and safety issues. The corporate and site management are experienced personnel with a clear understanding of the roles and responsibilities. Review of the corporate level EHS performance shows that the Company is capable of operating to the Bank’s Performance Requirements. Further, the Company displays innovation in regard to energy efficiency and the Russian operations will benefit from, and contribute to, Continental’s global effort in this regard. An Action Plan has been agreed with the Company whereby they have committed to allocating resources and implementing procedures and standards in line with their corporate standards which meet Russian legislation, EU environmental standards and the Bank’s PRs.

Technical Cooperation

Dedicated TC resources may be considered by the Bank to support the tyre industry initiative, including the support to the Russian Government in drafting specific legislation facilitating waste tyres recycling, in conjunction with the progress of the industry working group with respect to the action plan and its policy dialogue with the Russian Government.

Company Contact

Mr. Georgy Rotov, General Manager, LLC Continental Kaluga, tel. +7 4842 211 620; e-mail: georgy.rotov@conti.de

Mr. Berkan Cavan, Group Financing, Finance & Treasury, Continental AG, tel +49 511 938-1551;
e-mail: berkan.cavan@conti.de

 

Business opportunities

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