Continental's Controlled Withdrawal from Russia Impacted by Conflict in Ukraine

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German tire manufacturer, Continental AG, has announced its controlled withdrawal from Russia, as a result of the ongoing conflict in Ukraine.

Continental's decision to withdraw from the Russian market comes in response to the rising prices of goods, raw materials, and energy due to the conflict in Ukraine.

During the annual financial results press conference on 8th March, CEO Nicolai Setzer stated that the war had caused prices for goods, raw materials, and energy to rise, leading to the decision to sell Continental’s business operations in Russia.

Continental's Tire Production Plant in Kaluga Included in the Withdrawal

The withdrawal will include the sale of Continental’s tire production plant in Kaluga, which was opened in 2013 at a cost of €240 million. Although the company is already at an advanced stage in the sale process, regulatory approvals are still required for the transaction to be completed.

Last year, Continental halted its operations in Kaluga due to the war in Ukraine. In April, the company resumed production of passenger tires on a temporary basis to fulfil its duty of care to its employees in Russia and protect them from prosecution.

According to the ERJ’s Global Tire Report 2021, Continental has the capacity to manufacture 3 million units of passenger car and light truck tires at the Kaluga plant, where it employs 1,000 people.

The move is part of a trend of western companies leaving the Russian market due to the challenges posed by geopolitical tensions and economic sanctions.

While Continental's departure from Russia reflects the challenges posed by geopolitical tensions and economic sanctions, the company remains dedicated to its global operations and the well-being of its employees.

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