Yokohama plants roots in U.S. soil
Yokohama Tire Manufacturing Mississippi LLC (YTMM), the new manufacturing subsidiary of Yokohama Tire Corp., broke ground on its new commercial truck tire plant in West Point, Miss., in September. Now, company executives are focusing on a tight schedule that will lead to the first tire rolling out in October 2015.
The company is investing $300 million in its first ground-up U.S. plant, which is good news for the Clay County area of Mississippi, where 500 jobs will be created in the first phase of the project.
Subsequent phases not yet outlined could eventually expand the facility from the initial one million square feet to five million square feet, which would be 115 acres under roof. At that point the plant would have 2,000 employees and produce 4 million tires annually.
“The U.S. commercial tire market is growing,” says Hikomitsu Noji, president of Yokohama Rubber Co. Ltd. “I think it is getting better compared to last year and the year before. Europe is not so good and China is getting worse along with the Russian market.”
Noji says that currently the company ships truck tires for the U.S. market through its partnership with Continental Tire the Americas LLC, where the companies jointly own the GTY truck tire plant in Mount Vernon, Ill. Its production capacity is 3,900 truck tires per day, according to the 2013 Modern Tire Dealer Facts Issue.
“We also make truck tires at the Yokohama Rubber (Thailand) Co. Ltd. plant in Rayong Province, Thailand, but it’s not good enough. Demand is more.”
The tires produced at the new plant will be sold in the U.S., Canada and Mexico.
“We don’t have any plans to expand into South America at this point,” says Tadaharu Yamamoto, president of YTMM. “Our plant is being designed to have the latest technology available so we can offer truck tires with good retreadability, durability, longevity and efficiency.”
“This is the first plant we are building ourselves and it shows a major commitment by Yokohama for the North American market,” says Noji. “We will be here for a long time.”
“The reason for putting more production in the United States is not just for the U.S. market,” says Takayuki Hamaya, CFO and COO of Yokohama Tire Corp.
“Yokohama’s total capacity is too small for worldwide demand and opportunity. A big percentage of our commercial business is in the U.S., and is growing. Worldwide, the U.S. market is our biggest opportunity for growth.”
Hamaya says that with both consumer and commercial tires, Yokohama is concerned about the influx of Chinese tires into the U.S. market since the expiration of Tariff 421 in September of 2012. That influx is affecting consumer purchasing, and that is a long-term concern for the company.
“Chinese brands are coming into the U.S. market and the price level is coming down. Cheap tires are coming in and the Tier Two and Tier Three brands are reducing their prices to compete with the Chinese product. Then the Tier Two and Tier One have to adjust also. I have no intention of adjusting our product price to the Chinese level.”
Hamaya says Yokohama’s commitment to the U.S. market is not comparable to anything the company has done in the past. “We are going to produce one million TBR tires per year, 3,000 pieces a day, every day. The first tire comes out October 2015, and then it will take two more years to get to full capacity. This is the point where you will see a big difference between Yokohama in the past and in the future.” ■
How to start a tire plant
Hikomitsu Noji, president of Yokohama Rubber Co. Ltd., is based in Japan. However, he also serves as CEO of all of Yokohama’s operations in North America.
The groundbreaking for the Yokohama Tire Manufacturing Mississippi plant on Sept. 23, 2013, was attended by Mississippi Gov. Phil Bryant (left) and Hikomitsu Noji, president and representative director of Yokohama Rubber Co. Ltd.
According to Alan Easome, Yokohama Tire Corp.’s senior director for new plant development, the new Yokohama Tire Manufacturing Mississippi LLC (YTMM) plant will provide additional capacity the company needs to meet increased demand.
“October of 2015 will be the commencement of mass production. Then there will be a scale up to 3,000 tires per day and 24/7 operation.”
Easome is tasked with supporting the construction and startup of the facility. He says the first step was the site selection process. It took several months and the company considered multiple sites throughout the country. After choosing a 570-acre site in West Point, Miss., the company chose Kajima Building and Design Group as the project’s architects and designers.
“Our engineers are working closely with them in developing the requirements for the building to support our production technology.”
The next step is to hire a general contractor, which will be announced sometime in Q4 2013.
While all that is going on, Yokohama has teams in place working on developing the technology plan, the design of the equipment, the level of automation and where to automate.
“Also concurrently we have teams in place to work on our staffing efforts because of the lead time it takes to train. There will be many new employees and in this particular area, a lot of the workforce has no prior tire experience. There will be a substantial training effort involved.”
Easome and his team have their work cut out for them, with a 27-month timeline from groundbreaking to the first production tire from a highly automated and advanced production facility.
When it’s fully up and running and producing one million units annually, it will have approximately 500 employees.
“We chose this location because the site does not require a tremendous amount of prep work, it has ample utilities, and it has a great community that we can pool resources from and support.”
As a show of support, Yokohama is donating $250,000 to East Mississippi Community College (EMCC) and another $250,000 to Mississippi State University. According to Tadaharu Yamamoto, president of YTMM, the gifts will be used to develop training programs and curriculum to develop the workforce of the new plant.
“These educational institutions prepare their students to be the workforce of tomorrow, as well as to become exemplary leaders,” says Yamamoto.
“We’re partnering with EMCC specifically for training and development of our production employees,” says Easome. “We also want to have a close collaboration with Mississippi State for the engineering school, the business school and to support us and have a close relationship.” ■