ContiTech looks east, reports marginal loss

Hanover, Germany – ContiTech AG, part of Continental AG, has announced that it invested €191 million in new plants and locations worldwide in 2014.

"We reinforced our presence in Asia because we want to be where our customers are," explained the outgoing ContiTech CEO Heinz-Gerhard Wente at a press conference at the Hanover Messe industrial technology show on 14 April.

"In China, we have opened a hose line plant in Hanghzou and a production facility for industrial belts in Sanmen. We have expanded production of air springs in South Korea.

"We have also made investments in Germany (gas power plant in Northeim), Slovakia (production and research for vibration elements), Russia (hose line production in Kaluga), and Peru (sales office for conveyor belts in Lima)," added Wente who is retiring at the end of April to be replaced by Hans-Jürgen Duensing.

Commenting on the recent takeover of US conveyor belting company Veyance Technologies, Wente said: "The integration of Veyance is high on our agenda this year."

On the financial front, ContiTech reported an operating loss of €29 million in2014 with the figure dropping from €462 million 2013 to €433 million in 2014 – despite a 1.3-percent rise in sales to €3.9 billion.

"We are thoroughly satisfied with this result and the continued double-digit return on sales. Particularly in light of the negative developments in certain sectors of relevance for ContiTech," said Heinz-Gerhard Wente, head of the ContiTech at a press conference at the Hannover Messe 2015.

Wente stressed that costs associated with the integration of the Veyance business were included in the 2014 results.

"Continuing low commodity prices resulted, in particular, in a significant decline in investment in the mining industry in 2014 and had a negative impact in the conveyor belt group. Here, we had to absorb a decline of €66 million alone," said Wente.

"However, we were able to offset this with increased sales in other business units. Benecke-Kaliko and the Power Transmission Group, in particular, with sales increases of €77 million and €36 million respectively, made above-average contributions toward this.