Tyre giant Continental AG and Eu-Retec (Pvt) tie-up

Continental AG, the world's fourth largest tyre manufacturer recently entered in to a strategic alliance with the local solid tyre Company, Eu-Retec (Pvt) Limited.

The documents pertaining to this agreement were signed by the Sri Lankan Entrepreneur and Chairman/Managing Director of Eu-Retec (Pvt) Limited, Anurath Abeyratne and Dr. Michael Maertens, the Managing Director of Continental Industrial Tyres, in Colombo.

Continental AG is a multi billion dollar company with annual sales over Euro 25 billion and a total work force over one hundred and fifty thousand workers across the world.

Continental AG, whose Headquarters is in Hanover, Germany has over 200 production sites in Europe, North America, South America, Africa and Asia. It has achieved a substantial growth in the market share over the past years as a result of carefully planned mergers, acquisitions and strategic alliances such as this. Eu-Retec (Pvt) Limited is an ISO certified, BOI venture producing Industrial solid tyres, which are used for forklifts and other material- handling equipment.

It started operations in 1999 and has been producing new and re-moulded industrial solid tyres for several years. Eu-Retec tyres have been the preferred choice in load carrying trucks at sea-ports and air-ports for their high-quality standards and durability. Its special producing capabilities for non-marking solid tyres have gained a large share in the pharmaceutical and food industry as well as other `clean room' material handling applications.

These capabilities have gained for Eu-Retec a significant percentage of the market share.

The company's products are exported to buyers around the world, from the USA to Europe, Australia, Canada, Hongkong and Singapore.

Eu-Retec was awarded the Gold Medal in Industry - Extra large category at the NCE Exports Awards in 2005 and it was also nominated for the Most Outstanding Exporter of the Year Award in the same year.

The new alliance would bring good news to the now ailing rubber industry as its rubber consumption stands at four times the total rubber production in Sri Lanka, and is bound to continuously expand with its diversification into many types of rubber based products and new markets.

The rural rubber plantation, which is the lifeline of many communities, today faces a big crisis.

However, with the increased demand due to the new partnership, Sri Lanka has every opportunity to bring the rubber industry back on its feet and boost it to growing heights. Sri Lankan growers can take hope, as the joint venture between Eu-Retec and Continental will be sourcing rubber for many products now in the pipeline.

Furthermore, Sri Lanka's capability to provide low cost, high quality rubber and rubber products is a great source that the joint venture will be keenly looking at.

Whilst this is the first time that such a large global player has chosen to invest in Sri Lanka, it is evident from this investment that Sri Lanka was considered a safe and stable destination to invest. Commenting on the investment, Anurath Abeyratne, Managing Director of Eu-Retec (Pvt) Ltd. said that the future potential of Sri Lanka's rubber industry, the Government policy under President Mahinda Rajapaksa and introduction of Export Development Reward Scheme (EDRS) attracted Continental for the investment which is in excess of 5.0 million Euros.

Dr. Michael Maertens who will become the Chairman of Eu-Retec (Pvt) Ltd. under the new agreement said that the commitment for quality had brought many accolades to Eu-Retec in the competitive market and it even helps the Company to stand steady even at a time of global economic slowdown.