German Continental AG, one of the world's top 500 enterprises and a famous manufacturer of tires and other auto parts, is planning to build a 150 million euro (1.62 billion yuan) plant for making premium tires in Hefei city, Anhui province.

Plant construction of the project, invested through Continental Tires (Shanghai) Co., will begin later this summer. Tire production is expected to start in 2010. The plant will have a final annual capacity of four million passenger tires for the booming Chinese market, though, it will take some years to reach. This project still needs to be approved by the central government in Beijing.

The facility will be mainly engaged in the manufacturing of Continental's ultra-high-performance (UHP) tires of the premium Continental brand, and the new plant is being equipped with ultra-modern production and environmental technology. The German company will set up a qualification program and cooperate with the local university for the training of the employees.

The plant will employ more than 1,100 people. For over 10 years, the German province of Lower Saxony has had an exchange program with the University of Hefei. As a result, Hefei has many highly qualified Chinese workers who can speak German.

Heifei, about 450km northwest of Shanghai, is conveniently located between Beijing and southern China. The provincial capital "is a future boom town," says Klaus Kreipe, general manager of Continental Tires (Shanghai). Anhui province is also home to Chinese automakers Chery Auto, and Anhui Jianghuai Auto.
    
Continental Tires is also establishing a chain of tire and service shops in China. The company had opened its 100th Continental Certified Service store by the end of 2007, ramping up to 200 by early April 2008.