The technology company Continental announced the construction of a new manufacturing plant in Hungary to expand its automotive electronics production footprint. Continental currently has six plants and a tyre sales and logistic center in Hungary. By choosing Debrecen as the seventh Hungarian location, Continental is increasing the production of electronic components for European markets. The groundbreaking ceremony is scheduled for the third quarter of 2018. Continental plans to invest a total of €100 million and will create 450 new jobs.
José Avila, Member of the Executive Board of Continental and Head of the Powertrain division said: “With this strategic decision of a new manufacturing plant in Debrecen, Continental is continuing to expand its European presence in order to better satisfy the customers´ growing demand for automotive electronics.”
“To expand our European presence with our new plant in Debrecen is an important pillar in order to diversify our manufacturing plants for state-of-the-art automotive electronics internationally. Together with the Hungarian government we are able to significantly expand our capacity and further drive our technology development”, added Dr. Hans-Jürgen Braun, head of the 30 Continental central electronics plants.
“Having earned the trust of our customers on account of the best-in-class quality of our products and services, we are also able to expand our operations in the field of the production of sensors & actuators and transmission control units. The investment in Debrecen proves that Continental considers Hungary to be a strategic partner and a reliable country to cooperate for future success. Hungary remains a strategic investment area for Continental,” said Dániel Rábai, Head of Focus Country, Continental Hungary.
“As the second largest city in Hungary and also a regional center with an outstanding infrastructure and highly qualified workforce, Debrecen is the ideal location for our next expansion. The decision reflects the trust in and strong positive feedback about the performance of the existing Continental organization in Hungary”, said Dr. Róbert Keszte, Managing Director at Continental Automotive Ltd. “The Hungarian government, and the local municipality were providing an excellent support to prepare the investment, so we can progress quickly and complete the construction by the middle of 2019.”
“The establishment of Continental’s new manufacturing plant is yet another proof that Hungary is one of the most attractive countries for automotive investments in Europe. Relying on Hungarian expertise, productivity and creativity, the strategic geographical location and favourable manufacturing costs, the automotive companies in Hungary are continuously expanding their footprints and developing their products, thus making long-term commitments in the country. Continental’s new facility will further improve the competitiveness of Hungary and strengthen its position as the regional hub within the automotive industry”, said Róbert Ésik, president of the Hungarian Investment Promotion Agency (HIPA).
Products of Continental’s Transmission and Sensors & Actuators business units are the first to be manufactured on a production site of 7,000 square meters and assigned to EU markets.
Meanwhile, Continental and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH announced that they are joining forces in a development partnership to improve the sustainability of the natural rubber supply chain in Indonesia. The country is the world’s second largest producer of natural rubber. The aims are to develop a criteria catalog for sustainable production of natural rubber, to train farmers in sustainable production in accordance with these criteria and to track the rubber from smallholders to production at Continental. Improved rubber quality, higher yields and supply chain optimization will generate higher incomes for rubber tree cultivators. The partnership between Continental and GIZ is part of the develoPPP.de program initiated by the German Federal Ministry for Economic Cooperation and Development (BMZ). To ensure that supply chain partners are on board, memorandums of understanding have been signed with two suppliers.
Rubber trees grow in the same area where the rainforest grows. Therefore, it is important to ensure that rubber tree cultivation does not lead to deforestation. To safeguard and monitor sustainable rubber production, Continental and GIZ will implement a traceability system and increase the traceable production of rubber in West Kalimantan over the next three years. In total, 400 farmers will be trained to grow high-quality rubber in accordance with clearly defined sustainability criteria. An electronic system will be developed to ensure full traceability of the raw material along the entire supply chain.
“Our objective is to establish a traceable and sustainable supply chain and set a best practice example for the production of natural rubber,” said Nikolai Setzer, who is in charge of Corporate Purchasing and the Tire division in the Executive Board of Continental AG. “The partnership with GIZ gives us access to local players whom we need to achieve traceability and sustainability.”
Continental is consistently increasing the importance of sustainability in purchasing in other ways besides this development partnership. Despite already having a clear policy and enforcing mechanisms to avoid non-compliance behavior in the supply chain by its supplier, the Sustainability Management team in Corporate Purchasing at Continental is preparing a specific natural rubber sustainability policy for Continental to be released in 2018. This policy is designed to further reinforce the unquestionable commitment of the corporation to securing a healthy and compliant supply chain and the zero tolerance attitude toward deforestation, land grabbing and other practices that harm local populations and the entire eco-system. At the same time, Continental representatives on the World Business Council for Sustainable Development (WBCSD) are actively working to establish an industry standard for the sustainability of natural rubber. The eleven leading tyre manufacturers in the world are involved in the WBCSD’s Tire Industry Project.
Furthermore, in 2017 Continental worked with a service provider to establish a sustainability evaluation for existing and potential suppliers on the basis of standardized questionnaires. The scope of this evaluation is enormous as the company has to cover a couple of hundred companies currently supplying raw materials to its locations. At present, more than 80% of its Rubber Group raw material suppliers have already been evaluated and further development activities have already been started.