Cooper sharpens its focus on China
Cooper Tire & Rubber Co. went to Boston — and talked a lot about China. Industry analyst and Modern Tire Dealer columnist Nick Mitchell was part of a team from Northcoast Research Holdings LLC to host the Ohio tire manufacturer during a marketing day event in Boston.
Mitchell says the Findlay, Ohio-based manufacturer is upbeat that it can outperform the expected growth in the tire market in the next two years.
Cooper’s Ginger Jones, vice president and chief financial officer, and Christine Hannemen, director of investor relations, participated in the event. They said tire volumes are expected to increase about 5% per year through 2017 — or about twice as fast as the rate experiences from 2010 through 2013. China is expected to account for at least 40% of the volume growth, and Cooper is expecting “industry shipments to China to expand at an annual clip of 10% to 12%, or nearly four to five times as fast as the 2% to 3% rate projected for markets in North America and Western Europe," Mitchell says.
That growth leads to another important project on Cooper’s to-do list: how will it re-invest the proceeds from its sale of Cooper Chengshan Tire Co. Ltd. (CCT.)
Mitchell says the company is placing a lot of emphasis on its strategy in Asia, “especially in light of the fact that well over 80% of its revenue and essentially 100% of its operating income are currently coming from its North American operations.”