Since gaining financial independence from its petrochemical parent last year, Sibur Russian Tyres has put in place an ambitious restructuring plan.
The plan involves a number of steps including the closure of out-dated manufacturing operations and replacing them with new manufacturing facilities to meet the needs of the market. A key element in the strategy is to form a joint venture with a large international tire company to make high quality passenger car tires.
According to Igor Karavaev, member of the main board at Sibur, the company has annual sales of around $800 million, but debts of only $100 million, so it can easily raise up to $500 million in cash through debts before it has to consider issuing shares through an initial public offering. For its recently ended fiscal year, the company had budgeted for a small loss, but instead will make a small profit, he said.
The company is therefore looking to restructure the product portfolio at each of its four tire factories and also is investing at its non-tire facilities. Those include Russia´s largest maker of industrial hose-Rezinotekhnika, based in Saransk, south of Moscow-and Sibur Volzhsky, a tire cord facility in Volzhsky, in Russia´s deep south, close to the border with Tartarstan.
On the tire side, Sibur owns and operates a Yaroslavl tire plant, which makes all-steel truck tires, light truck tires and aircraft tires. The Omsk tire factory makes truck tires, agricultural tires, bus tires and non-tire technical rubber goods.
Sibur also has a 50-percent stake in the Matador-Omsk tire factory, which specializes in passenger car tires. The Volzhskyprom plant makes agricultural, forestry and industrial off-the-road tires, while the Uralshina tyre factory makes passenger car tires, two-wheeler tires and industrial tires.
Karavaev said that Sibur believes it cannot compete in the car tire market against the imports and the transplant tire factories, so it wants to form a venture with a foreign tire maker in which Sibur owns a minority stake, and yields full control to the partner.
The model for this is the Matador-Omsk joint venture, in which each partner takes 50 percent of the factory output, he said. Sibur, however, would aim to take a minority share of the output from a future joint venture facility, in order to boost its product portfolio with premium quality tires.
Additionally, Sibur has opened a subsidiary in Berlin, aimed at entering Western European markets.
The company said interest from European consumers prompted it to establish a subsidiary in Germany, which will help it to optimize sales and distribution in Western Europe.
Currently, 25 percent of the company´s production is exported to the former Soviet Union nations in the Commonwealth of Independent States, the Middle East, and Western and Central Europe, the firm said.