Cooper buys Serbian tire plant
Cooper Tire & Rubber Co. recently signed an agreement to acquire the assets of an existing tire plant in Kruševac, Serbia. Located approximately 124 miles south of the Serbian capital of Belgrade.
According to Cooper Tire, the Kruševac plant "provides an excellent location to supply tires to the European and Russian markets."
The wholly-owned subsidiary, which will be known as Cooper Tire Serbia, will complement Cooper's well-established European operations and product offerings, including the high performance tires manufactured at the Company's Melksham, England, facility. "It is a logical next step in the high quality, cost-effective manufacturing footprint underpinning Cooper's strategy of profitable top-line growth."
Cooper purchased the plant for close to $17 million. Over the next three years, Cooper will invest an additional $50 million. The Serbian government will support the project in several ways; its investment could reach $13 million if certain goals are achieved.
"The Serbian government is very supportive of this transaction and promoted the benefits of the location, the labor force and the competiveness in the region," said Hal Miller, president of Cooper's international tire business unit. "As a global tire company, developing this well-situated source of quality supply will benefit customers, employees and our shareholders."
The plant initially will employ 400 people, with plans to grow to a production capacity of three million tires with 600 to 700 employees within three years. "There is room for even greater capacity with further investment in the business," added Julian Baldwin, vice president and managing director of Cooper European Operations.
The transaction is expected to close during the first quarter of 2012 and is subject to regulatory approvals, confirmatory due diligence and other conditions.