Cooper looks to China to boost truck & bus tire supply
Cooper Tire will massively ramp up its production capability after buying a majority stake in a China-based truck and bus radial tire plant.
Cooper Tire and Rubber Company announced last week it had agreed to buy 65 percent of Qingdao Ge Rui Da Rubber Company Limited for $93 million, which also includes some initial investments. The transaction is expected to close in the first half of this year, pending Chinese Government approvals, and will see Qingdao renamed Cooper Qingdao Tire Company Limited (or CQT).
Cooper adds millions of Chinese tires to its annual production
Once at full capacity Cooper estimates the factory will be capable of producing 2.5 million to three million truck and bus tires a year, plus almost the same number of passenger tires.
Cooper told the market CQT was expected to serve as the company’s global source of truck and bus radial tire production, including Roadmaster brand tires for the North American market.
The company also plans to produce passenger car radial tires at the one million-square-foot facility in the future. There is also room to expand the plant in the future.
Cooper chief operating officer Brad Hughes said securing the truck and bus tire supply was important to the company’s Asia growth strategy.
“After a comprehensive review of options, we are pleased to have reached this agreement, which meets our goal of finding a new source of high-quality, cost-competitive TBR tires for North America and Asia,” he said.
CQT joins Cooper’s seven other tire manufacturing facilities including three U.S. plants — Findlay, Ohio; Texarkana, Arkansas; and Tupelo, Mississippi — as well as facilities in England, Serbia, Mexico and one other plant in China in Kunshan.
Extensive and experienced workforce part of the deal
Qingdao is in northeast China and the Qingdao Ge Rui Da Rubber Company’s plant is just north of the city. It was established in 2014 after Qingdao Yiyuan Investment Company Limited (QYI) purchased the assets of the then idle facility. It currently employs about 600 workers.
QYI founder, executive director and general manager Li Zhihua — a tire-industry veteran — said QYI had focused on truck and bus tire production at Qingdao and had put in place an experienced management team and skilled workforce with “extensive tire industry expertise.”
“We look forward to working with Cooper to maximize the opportunity we have together to drive continued innovation and expand manufacturing of quality truck and bus radial tires and other products,” he said.
Cooper chairman, chief executive and president Roy Armes said Qingdao was a “very impressive” company with “deep industry and technical knowledge.”
“There’s a strong workforce, facilities that we can continue to expand with further capital, and a management team that is focused on the current opportunity in truck and bus radial tires as well as our wider growth plans for Asia,” he said.
“This is a great strategic fit within our existing and highly productive worldwide manufacturing network and will allow us to further optimize our global footprint. We welcome the (Qingdao) team to the Cooper family and look forward to many years of success together in the future as CQT.”
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