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September 09, 2010 02:00 AM

Czech tire maker CGS to build tire plant in Iowa

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    CHARLES CITY, Iowa—Czech tire maker CGS Tyres A.S. has officially announced it will build a farm tire plant in Charles City for $43.8 million.

    The company, which confirmed previously disclosed plans to open the plant in Iowa, said it will take 16 months to complete the project. CGS made the announcement at a Farm Progress Show in Boone, Iowa.

    CGS and Charles City officials signed agreements recently covering CGS Tyres' commitment to convert an idled Winnebago Inc. facility in Charles City to farm tire production by January 2012. The pacts call for additional investments of more than $22.7 million through 2016.

    The state of Iowa has committed $924,000 in incentives through its Grow Iowa Values Fund.

    CGS Tyres, the tire business unit of CGS A.S. Holding of Prague, Czech Republic, plans to develop the plant in three stages, depending on demand. After completion of the third stage, the factory will employ 262 and have an annual production capacity of 12,200 metric tons of radial farm tires.

    Employment initially will be at least 159, CGS said, with about 4,100 tons of annual capacity.

    “We bring 78 years of expertise in tire making,” said CGS CEO Jaroslav Cechura. “U.S. farmers will benefit from our advanced tires and increased competition.”

    In disclosing its investments, CGS said Charles City's proximity to farm equipment makers such as Deere & Co., Agco Corp., Claas Group, CNH America L.L.C. and Kubota Tractor Corp. was a key consideration.

    CGS already is a major supplier of radial agricultural tires for new tractors and combines produced at the European plants of these companies.

    CGS also cited the city's proximity to Canadian and Mexican original equipment and replacement markets as well as the size and layout of the plant being suitable for installing both bias-ply and radial manufacturing capacity. CGS plans to make both Mitas- and Continental-brand farm tires at the plant.

    CGS is represented in North America by CGS Tire U.S. Inc. in Charlotte, N.C. CGS Tyres' sales in North America were $10 million last year.

    With 2009 tire-related sales of $318 million, CGS is considered the 43rd-largest tire maker worldwide. In addition to farm tires, CGS makes Mitas-brand industrial and motorcycle tires and a variety of industrial rubber products.

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