BUENOS AIRES--European tyre producer Continental plans to open a subsidiary in Argentina in the second half of 2008, possibly shifting supply/demand fundamentals for styrene butadiene rubber (SBR) in South America, a source familiar with the situation said on Monday.
The company will be importing tyres mainly from its manufacturing plant in neighboring Brazil, located in the industrial complex of Cama ari in the Bahia State, as well as from Europe.
Financial details were not disclosed.
The opening of the new commercial division will end Continental's arrangement with Fate Argentina, which currently has the licence to produce the brand of tyres in the country. That deal will terminate by the end of July 2008, the source said.
The end of Fate's deal with Continental will not necessarily decrease the company's Argentina production, however, since Fate could well seek to produce tyres for export, the source said.
Tyre production is the primary end market for SBR.
Since a worldwide shortage of feedstock butadiene (BD) is forcing SBR producers to cut back on production and control sales by raising prices, tyre producers were likely finding plentiful selling opportunities, a Latin American analyst said.
Fate currently obtains SBR from the Brazilian state-run Petrobras, which has a production facility in Rosario, in the Argentine province of Santa Fe. It gets carbon black, a pigment used in tyres, from Cabot which has its own facility in the Zarate Campana complex in Buenos Aires.
Continental will be competing with other main brands in Argentina, such as Pirelli, Bridgestone Firestone, and Fate, with each currently holding about a one-third market share.
Consumption of tyres in the first four months of 2008 reached 3.9m units in Argentina, according the Sectorial Economic Investigations consultancy, or 19.2% more than the same period in 2007.
Local manufacturing sources estimated that year to date production of tyres in Argentina through May was of some 4.8m, compared with 12.2m units during the full year of 2007.
The interest in the Argentinean automotive industry is due to the period of high growth in the industry, an industry analyst said.
The auto industry has been showcased as one of the pillars of the government's economic plan. Argentina will produce some 750,000 vehicles per year by 2010, compared with 500,000 units in 2007 according to one unofficial estimate.
Car production also represents demand for engineering plastics and other chemical-related products.
Official statistics from the Argentine census bureau INDEC showed the country's automotive industry grew 6.8% in the first quarter of 2008 compared with the same period of 2007.
The company will be importing tyres mainly from its manufacturing plant in neighboring Brazil, located in the industrial complex of Cama ari in the Bahia State, as well as from Europe.
Financial details were not disclosed.
The opening of the new commercial division will end Continental's arrangement with Fate Argentina, which currently has the licence to produce the brand of tyres in the country. That deal will terminate by the end of July 2008, the source said.
The end of Fate's deal with Continental will not necessarily decrease the company's Argentina production, however, since Fate could well seek to produce tyres for export, the source said.
Tyre production is the primary end market for SBR.
Since a worldwide shortage of feedstock butadiene (BD) is forcing SBR producers to cut back on production and control sales by raising prices, tyre producers were likely finding plentiful selling opportunities, a Latin American analyst said.
Fate currently obtains SBR from the Brazilian state-run Petrobras, which has a production facility in Rosario, in the Argentine province of Santa Fe. It gets carbon black, a pigment used in tyres, from Cabot which has its own facility in the Zarate Campana complex in Buenos Aires.
Continental will be competing with other main brands in Argentina, such as Pirelli, Bridgestone Firestone, and Fate, with each currently holding about a one-third market share.
Consumption of tyres in the first four months of 2008 reached 3.9m units in Argentina, according the Sectorial Economic Investigations consultancy, or 19.2% more than the same period in 2007.
Local manufacturing sources estimated that year to date production of tyres in Argentina through May was of some 4.8m, compared with 12.2m units during the full year of 2007.
The interest in the Argentinean automotive industry is due to the period of high growth in the industry, an industry analyst said.
The auto industry has been showcased as one of the pillars of the government's economic plan. Argentina will produce some 750,000 vehicles per year by 2010, compared with 500,000 units in 2007 according to one unofficial estimate.
Car production also represents demand for engineering plastics and other chemical-related products.
Official statistics from the Argentine census bureau INDEC showed the country's automotive industry grew 6.8% in the first quarter of 2008 compared with the same period of 2007.
