HANOVER, Germany—Continental A.G. is exiting Russia. And it looks to have a buyer for its tire plant there.
After altering its manufacturing throughout the country last year, Continental confirmed during a financial call with investors March 8 that it has launched a "controlled withdraw" from Russia.
"2022 was particularly challenging for us in several respects," Continental CEO Nikolai Setzer said in a prepared statement. "The war against Ukraine drove up the prices for raw materials, semi-finished products, energy and logistics. It is also the reason why we continue to strive for a controlled withdrawal from the Russian market."
On the call, Setzer implied that Continental's facility in Kaluga, Russia, has a buyer, but did not disclose any details about the transaction.
"We are already at an advanced stage of the sale process here," Setzer said, noting that regulatory approvals required to ensure completion have yet to be received.
Continental's Kaluga plant opened in 2013, employed around 1,000 and had a total capacity of about 3 million tires annually, according to Rubber News' Global Tire Report data.
Following Russia's invasion of Ukraine in February 2022, the tire industry—particularly in Europe—was hit hard by the subsequent sanctions and supply line squeezes. Continental was no different.
In a news release detailing its full-year financial results, Continental noted that its business activity in Russia saw impaired assets of around $91.5 million as a result of the imposed sanctions.
Continental is the fourth major tire maker to signal complete withdraw from Russia.
Michelin was among the first to say it would cease operations in the country, which accounts for about 2 percent of its global sales. The company, however, still controls its assets in Russia and says it is working toward a full withdrawal.
Bridgestone in October signaled that it had placed a for-sale sign at its facility in Ulyanovsk, Russia, where it employed around 1,000.
Most notably, though, Nokian Tyres P.L.C. has worked to cease operations and sell its assets there. The company found a buyer for the facility in Vsevolzhsk, where it employed around 975. Nokian said 80 percent of the company's passenger tires were produced at the factory.
The firm also has realigned its global footprint and established contract manufacturing to ensure it can meet demand for its products.
Russia and Asia made up 20 percent of Nokian's global sales.
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