Continental expanding South Carolina tire plant again

SUMTER, S.C.—Continental Tire the Americas L.L.C. broke ground on a new expansion at its growing Sumter facility to bring new technology to its North American tire production.

The expansion includes a new building attached to the company's existing passenger and light truck tire plant in a significant investment, adding a 29,000-sq.-ft. production space onto the facility, said Ashton Elmore, Continental human resources manager.

The expansion, which will provide capabilities to produce ContiSeal and ContiSilent tires, comes during the ramp-up of the second of two major growth phases at the Sumter facility, Elmore said.

"We actually started Phase 1 back in 2013. And as you can imagine, we've been in a steady state of growth since then," Elmore said.

Continental's first phase at the Sumter plant brought its capacity to about 4 million tires per year, he said. It picked up its first original equipment customer in 2015, and added the second phase in 2017 to provide more light truck manufacturing capacity. It also brought the location's total footprint to about 2 million square feet, with about 1,400 employees, and tire capacity to about 7 million per year.

The new business unit, which isn't directly related to either phase, will add about another 50 jobs by 2020, he said. Continental broke ground on the new facility in March, and will begin the installation of equipment in September. Production of the technology-added tires is on target for starting May 2020. Investment figures weren't disclosed.

The facility won't add to the overall tire capacity total, but bring in new processes for tires already made there, Plant Manager Ahmed Boualam said.

"Phase 1 and Phase 2 are areas where we are producing tires, and this new expansion is one where we are going to add value to the tires," Boualam said.

New technologies

ContiSilent can reduce interior noise from road surfaces up to 9 decibels through an interior polyurethane foam, attached with an adhesive. ContiSeal technology, developed by Continental, seals damaged tire tread and allows tires to take foreign objects up to 5 millimeters without the need for an immediate roadside fix, Elmore said.

"Basically, what happens is the holes remain sealed even if the puncturing object becomes dislodged," he said.

The additional technologies are able to be added to finished tires without negatively affecting mileage, Boualam said.

"Basically you have the capacity to reduce the noise and also to protect your tire against any puncture," Boualam said. "But at the same time, you do not impact negatively any other driving experience."

Managing the application for the technologies running through an extension to the company's finished goods warehouse keeps the production process very linear, Elmore said. "We're just taking a finished article and then basically introducing this technology to one of our finished tires which was produced here in this facility," he said.

The technologies also mean the introduction of some new equipment at the Sumter facility, Elmore said. While Continental has facilities in Portugal and the Czech Republic that can produce ContiSeal and ContiSilent tires, this will be the first North American location to have the capabilities.

"We're excited to have this business come to Sumter, and a way for us to continue building trust in our facility, and support the U.S. market and our growth from here," Elmore said.

Continental is seeing an increase in demand for tires with these types of technologies, especially as electric vehicles become more popular, Boualam said. Bringing that capability stateside was important for Continental to be able to manage that demand more quickly.

"This is related to the electrical cars, and the demand is really following the increase related to this market in the U.S.," Boualam said. "We know some brands, like Tesla for instance, it's easy for you to see how fast they're growing. This technology is really made for that kind of car."

The development also brings an overall value-add to Continental tires in the U.S., he said. Besides answering market demand, it helps make Continental more attractive compared to competitors. They did not comment on potential price changes with the new technologies going forward.

As overall automotive market sales numbers have dropped slightly compared to previous years, Continental has been fortunate not to see any negative impact to production as it continues to ramp up toward full capacity, Elmore said.

"For us locally, we're excited to have the investments we have, then get this new piece of technology for our facility, and make us even more competitive as far as our manufacturing location," Elmore said.

Investing in the plant is "believing in the future," as the new technologies are incorporated with Continental tires in the next year, Boualam said. "I think we have to move forward all the time. You do not stop the growth of a plant because the market is slowing down a little bit today."

A downturn in the automotive industry might not be a negative thing for Continental's tire business regardless, according to a company spokeswoman. As people keep their cars longer, that oftentimes means an increase in tire sales. As an automotive supplier with a tire element to its business, Continental can balance out a down market more effectively.

"It's important to know overall that Continental's tire business, the Continental brand and General brand in the U.S. has been growing fairly steadily because we built up our plants," the spokeswoman said. "We've added capacity to Mount Vernon (Illinois) over the years. Sumter is a greenfield site, which is not too old and is getting up to speed. We're able to produce more tires in the market."

On top of hiring for the new ContiSeal and ContiSilent unit, the Sumter facility also is still hiring in the ramp up for the second phase of expansion, Elmore said. Through 2019, the total employee count will pass 1,450, with continued hires expected across the board from entry level positions to more senior roles.

The facility also has partnered with the city to prepare the future work force, with youth apprenticeship programs and associate degree apprenticeships, Elmore said. It also has engineering cooperative learning opportunities through Clemson University.

"Our stakeholders in South Carolina have been really instrumental in helping us get started and helping us meet those targets and make sure we've got a prepared work force," Elmore said. "That's one of the things I would say has really been a key factor in our startups and our continued growth in Sumter."