Continental to source cycle tyres from Metro

German tyre maker Continental is tying up with Metro Tyres for sourcing its global cycle tyre and tube requirements. The company has signed a five-year agreement under which Metro will be its sole supplier of cycle tyres and tubes from India. With this arrangement, Continental hopes to expand its international market share.

Metro Tyres will begin shipment of tyres and tubes sometime in October 1999. These products will be manufactured at the company's new plant being set up at Ludhiana. It has acquired the modern tyre plant from Trelleborg of Sweden.at a cost of Rs 40 crore.

Continental will buy 1 million tyres and tubes from Metro in the first year. The number could rise later. Metro will get revenues of Rs 10 crore in 1999-2000 from the deal, and up to Rs 40 crore in the next three to four years.

Rummy Chabra, managing director of Metro Tyres, says the tyres and tubes will be sold in the US and European market under the Continental brand name.

Apart from the new plant, Metro has three units, which have a capacity to produce 1 lakh cycle tyres and tubes per day. The new plant will increase the capacity to 1.5 lakh units per day.