Continental strengthens presence in Latin America
Continental Tire North America Inc. has acquired the majority ownership of Compania Ecuatoriana del Caucho S.A. (ERCO), a leading consumer and commercial tire company in Latin America.
The acquisition gives Continental a significantly improved competitive position in Latin America, through ERCO's strong distribution network in Ecuador and the Andean region (Chile, Peru, Bolivia, Columbia, Venezuela and Ecuador), according to the company.
The ERCO Group is operated out of Ecuador and includes a tire plant in Cuenca, as well as associated operations including a rubber plantation, retreading plant, tire import businesses and various retail chains in the Andean region.
"Majority ownership of ERCO provides Continental with the ability to improve our entire value chain -- from the rubber plantation to the retail stores -- throughout the Americas region through ERCO's strong competence in the tire business," says Matthias Schönberg, CEO of Continental Tire The Americas. "Our plan is to have ERCO manage the six countries of the Andean region so that we can expand our business in these critical growth markets which, together, have a larger population size than that of Mexico, but with faster growth."
The acquisition benefits both parties, according to Schönberg.
"Continental will enable ERCO to dramatically improve its product portfolio, as well as its visibility throughout the region. In turn, Continental can expand our business and fully utilize the opportunities in these growth markets, through a complete footprint in the Andean region."
ERCO sells the Continental, General and Barum brands. The tire plant in Cuenca produces passenger, light truck tires and truck tires.