Joint venture gives Cooper greater access to Mexico

Oct. 1, 2007

Cooper Tire & Rubber Co. and Corporación de Occidente SA de CV, a Mexican tire manufacturer, have formed a 50-50 joint venture company in Mexico.

The new company, Cooper Tire & Rubber Co. de Mexico SA de CV (Cooper Mexico) will be responsible for the marketing, sales and distribution of the Cooper and Pneustone brands, as well as all other associate brand tires marketed by the two partner companies.

The Pneustone brand is the house brand of Corporación de Occidente, a subsidiary company of Grupo Dexel, a Mexican holding corporation with entities involved in transportation, LP gas distribution, auto parts and construction equipment.

"This is a great opportunity to grow the Cooper brands in Mexico," said Phil Caris, vice president of sales and marketing for Cooper Tire's North American Tire Division. "By partnering with Occidente, we gain access to retail channels in Mexico and leverage existing relationships that Pneustone Brand has established with dealers throughout that country.

"Our existing customers in Mexico will benefit with the localized warehousing and increased focus on that market."

The headquarters for Cooper Mexico will be located in Querétaro, Mexico. A management team has been put into place under the leadership of Jim Smith, recently appointed general director for the new company. Smith was formerly controller at Cooper Tire's Texarkana, Ark., tire manufacturing plant.

Assisting Smith as director of marketing will be Chris Barbara, formerly Cooper Tire's manager of sales training in Findlay, Ohio.

Smith, Barbara and Hugo Ybarra, the newly appointed director of sales, will lead the core team primarily responsible for all activities associated with the new marketing company. Ybarra has 15 years of experience in the Mexican tire market.

In a related move, Cooper Tire has finalized a production arrangement with Corporación de Occidente to produce certain radial passenger tires in that company's production facility in Guadalajara, Mexico. The sourcing will be arranged in three phases, with a gradual ramp up to a targeted unit volume of nearly 2.5 million units per year. Passenger radial tires will be produced under this arrangement for sale in the North American market as well as in Mexico.

Tire production in Guadalajara is expected to begin in the fourth quarter 2007.