Tofan Grup repositions on tyre market

Tofan Group will conclude this year with $80 million in consolidated turnover, which is lower than last year, for reasons beyond its control. “The performance of the group was affected by the property litigation involving Tofan Grup and Danubiana as injured party and Rotras, Tofan Transport and Astra Transport where the shareholder structure has been under litigation since last year. The results posted by the three companies were not included in the above-mentioned turnover,” Gelu Tofan, the chairman of the group told Ziarul Financiar.

The company plans to reposition itself on the tyre market in 2004. Consequently, Tofan Grup teamed up with a German company for a new investment worth $5 million last week. The investment is aimed at opening two new lines on the Danubiana platform, one of which set to recap giant tyres and the other to recap truck tyres. The first line will become operational next year, while the other will start in 2005. “We aim to provide for the niches on the market at this moment, such as the tyres for agricultural machinery or the ‘budget brand’ sector,” Tofan explained. The repositioning plans also include expanding exports by tapping into the Eastern European market (Poland, Czech Republic, Hungary) because, as a paradox, most of the group’s exports are directed to the North American market. The group will also restructure the portfolio. “We have 794 different types of tyres, while major international players make 200 types less. We intend to bring the product portfolio to 60% of the current value, that is drop the small orders and go for those generating high profits,” Tofan specified.

Another market the Tofan group is targeting for expansion is the wheel service provided through Tofan Sama, a company established as a result of the takeover of a Romanian company operating in this field. “There are about 4,000 vulcanisation businesses in Romania, from small shops to major service facilities, but no consolidated network. Tofan Sama will originally offer six wheel maintenance and tuning operations under the Autofan brand, and then broaden the offer to about 20 such operations next year,” the businessman added.

A business that was supposed to be developed this year but will have to wait a while is the tractor business. The tractors were to be made under a partnership with a Polish company. “The entry of the Landini company that bought Tractorul Brasov has made us put the tractor business on hold,” Tofan explained.
dorin.oancea@zf.ro