A consortium of the Russian Direct Investment Fund (RDIF), Titan International and One Equity Partners (OEP) has reached an agreement in principle with Cordiant to invest in Voltyre-Prom, a Russian agricultural and industrial tyre manufacturer.
The transaction is expected to be finalised in the near future.
As result of the investment the consortium will own a controlling stake in Voltyre-Prom, with Titan International becoming its managing partner. The consortium’s investment will allow Voltyre-Prom to update its operations, grow its production of specialty tires for international agricultural machinery, reduce imports by shifting production to Russia and begin to explore export opportunities.
Voltyre-Prom is the leading producer of agricultural and industrial tyres in Russia. Its market share in agricultural tyres was 43 per cent and 16 per cent in industrial tires in 2012. The company produced circa 1.35 million tyres in 2012.
Kirill Dmitriev, chief executive of the RDIF, says: “RDIF completed this deal alongside world class strategic partners from both the global industrial and financial sectors. The involvement of investors of such scale underlines the growth prospects in the Russian agricultural sector. The expertise and knowledge of our partners will help shift the production of world-class tires that currently takes place overseas to Russia. This investment meets the fund’s objectives and represents an exciting opportunity to get a foothold in this sector.”
Maurice Taylor, chairman and CEO of Titan International, says: “Titan has plans to grow its tire, wheel and track footprint in Russia and CIS countries. John Deere, CNH, Agco and Caterpillar are just a few of Titan’s customers increasing their presence in Russia and CIS, and Titan will be there to service them and end users of their equipment as this expansion occurs. It is Titan’s belief that the future growth of global farming and mining lies in Russia and CIS countries.”
Dick Cashin, managing partner of One Equity Partners, says: "OEP and Titan welcome the opportunity to invest with RDIF to support the growth and development of Voltyre. RDIF has been an exemplary partner throughout the transaction. We are confident that we have the optimal strategy in place to share capabilities, maximise the strength of Titan’s brands, support Titan’s demanding international customers, and work with the very capable management and workforce at Voltyre."
Dmitry Sokov, CEO of Cordiant, says: “The agreement with the consortium will enable Cordiant to focus on passenger and truck tire markets. The deal also includes a three-year distribution partnership program, with Cordiant selling Voltyre’s passenger, truck and light truck tyres. Cordiant plans to invest almost USD550m up to the end of 2018 to expand its passenger and truck tire business. This will increase production capacity by up to 12 million tyres per year.”
