01 September 1997

Tofan Group emerges in Eastern Europe (Rubber and Plastic News)

BUCHAREST, Romania--What be-gan six years ago as a handful of retail locations in Romania is becoming one of eastern Europe's largest tire manufacturers.

Tofan Group S.A., a privately owned Romanian/Canadian tire production and distribution company, should post sales of $200 million this year.

Founded and directed by Georghe Tofan, the company has an annual production capacity of 15,000 units, obtained when Tofan bought majority ownership of the three largest tire manufacturers in Romania: Danubiana S.A. in Bucharest, Victoria S.A. in Floresti and Silvania S.A. in Zalau.

Tofan--also a Bandag Inc. retreading franchise--controls more than two-thirds of Romania's tire production capacity. The firm recently launched an in-house-produced, all-steel truck radial, which is made by Silvania.

The company's sales grew more than 80 percent in 1996 to $100 million.

The addition this year of Victoria and Silvania will more than double the 1997 sales figure.

Exports are expected to represent up to 25 percent of sales, including $10 million generated in the U.S.

The purchases of Victoria and Silvania were underwritten partially by Nomura Securities International, which arranged $100 million in financing for Tofan's growth projects.

Tofan hasn't linked with any western tire maker, either commercially or technically.

The firm's sales base is on par with Matador, the other remaining independent central/eastern European tire maker.

Bruce Davis

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