Titan negotiating for Russian acquisition
Titan International Inc. confirms that it has in cooperation with One Equity Partners (OEP) and Russian Direct Investment Fund (RDIF) entered into negotiations with Russian tire producer Cordiant about a potential investment in Russia.
Titan says it hopes to successfully complete these discussions in the near future.Titan will be the managing partner and is looking forward to working with RDIF and OEP.
Titan plans to grow its tire, wheel and track foot print in Russia and the Commonwealth of Independent State (CIS) countries. Titan says its customers such as John Deere, CNH, Agco, and Caterpillar are increasing their presence in Russia and CIS. Titan plans to service them as well as their end users of equipment with locally produced quality top quality tires.
The company says it believes that the future growth of farming and mining will be in Russia and CIS countries.
Also, Titan Chairman and Chief Executive Officer Maurice M. Taylor shared his views of the market through the first five months of 2013.
Taylor says, “I have stated over and over that all the talk of tire shortages has been false. Well, in the past couple months, millions of dollars in tires have been dropped into the aftermarket from the OEM’s in the farm and construction industries and also the mining companies, who had built up inventories greater than a year and are now releasing these tires.
“This will affect every tire manufacturer worldwide. The entire volume of tires will have an aftermarket effect for a few months before things get back to normal. We feel that this is a bump in the road as we have experienced this in the past.
“I think of all the overtime and weekend work to produce tires that go into building inventory and then when they see the storage cost, they discount them into the aftermarket. The selling price of all our products is going down because our material cost has been dropping. The guidelines that I gave in December of 2012 will be adjusted downward, but I need to find out approximately how much the mining companies will be lowering their inventories.
“Titan sold 44% of Titan Australia to our Planet Group partners so we could combine the companies to get the best results and grow the business. Bill Campbell took over the Bryan tire operation in April and has been getting that facility back on track, and he feels the facility will continue to improve through the year.
“We are still moving ahead on the acquisition trail and expect a number of these transactions to close before the end of this year. Overall, I still see this year as a record year and one that will set the course for Titan’s growth.”
For more information, visit the company’s website.