Bridgestone Corp. says it will broaden its ongoing capital spending program in global tire manufacturing. It also admitted it is looking at building new plants as part of that goal.
According to Bridgestone spokesman Shinichi "Shin" Kobori, the company has not determined a specific place in which to build a new plant.
"Our decisions on where to build plants are based on many criteria, but two significant items that we consider are the ability to produce a high quality product in the environment and the new plant's predicted cost structure. To be competitive in a global economy, we need to ensure that our products provide the highest quality and value to our customers.
"That said, we are always evaluating the competitive structure of all the places we do business, so I cannot rule out a new plant in the United States or Canada if we were able to ensure that the facility would be competitive on a global scale."
The company recently outlined its global tire manufacturing plans. It is realigning and expanding its production resources in response to the overall growth in global tire demand and to the changing composition of demand. Bridgestone said its newly broadened capital spending program provides for aggregate investment of some 227 billion yen ($2.1 billion based on the current exchange rate) over the five years from 2003 through 2007.
Because global tire demand is growing and evolving, Bridgestone's management policy centers on "pursuing strategic growth with a focus on quality by responding effectively to ever-changing market trends."
That is why the Bridgestone Group is realigning and expanding its tire production network. The group's primary objectives are to:
* deploy production resources to serve the shift in demand for passenger car tires in industrialized markets toward high-performance tires and tires of large rim sizes.
* expand production capacity to serve the growth in global demand for passenger car tires, especially in emerging markets.
* expand production capacity to serve the growth in global demand for truck and bus tires.
* acquire and foster expanded capabilities in producing raw materials for tires to respond to increasing tire production capacity.
Bridgestone says it will invest 88 billion yen to address the shift in demand toward high performance tires and "tires of large rim sizes." Investment projects include deploying the revolutionary BIRD production system.
The first mass-production BIRD installation went into operation earlier this year at the Hikone, Japan, plant. Bridgestone will install the first BIRD system outside Japan at a plant it will build in Monterrey, Mexico; that plant will supply high performance tires and tires of large rim sizes mainly to the North American market.
Bridgestone's Poznan, Poland, facility began producing run-flat tires at the end of 2004. It is the first Bridgestone plant outside Japan to produce run-flat tires. The company also recently announced it will produce run-flat tires at its Brits, South Africa, plant.
Bridgestone's moves to serve the growing demand for passenger car tires in emerging markets include opening a third Chinese tire plant in Wuxi in July 2004, and deciding to build a second Brazilian tire plant. Bridgestone also is expanding plants in Asia and Latin America.
Bridgestone is investing about 49 billion yen in expanding production capacity to serve emerging markets with passenger car tires, and about 50 billion yen in expanding production capacity for truck, bus and construction equipment tires. It began producing truck and bus tires recently at a newly constructed plant in Chonburi, Thailand, and is expanding production capacity for truck and bus tires at the Shenyang, China, plant and other plants around the world.
Investment by Bridgestone in projects for producing raw materials for tires will total about 40 billion yen. The company has built a carbon black plant in Thailand and a steel cord plant in China, and it is expanding production capacity for raw materials at plants in Japan, in other Asian regions and in the United States. Last year, Bridgestone agreed to purchase a rubber estate in Sumatra, Indonesia, from Goodyear Tire & Rubber Co.
As part of its announcement, management re-emphasized its determination "to build a globally optimized production network through strategic investment based on a sound reading of market trends."
