AKRON (Sept. 12, 2000)—Tire companies collectively budgeted nearly $1.6 billion in the past year for expansion around the globe, according to company announcements made during the last 12 months.
The 30-plus individual projects announced since August 1999 represent a cumulative increase in annual global capacity of 23 million to 28 million units in the coming two to three years.
This added output comes on top of about 15 million units of capacity brought on stream in the past year. At the same time, though, plant closings in the past year took more than 10 million units of annual production out of circulation.
Pirelli S.p.A. announced the largest investment package, committing up to $500 million in the next few years to build five or six plants based on its Modular Integrated Robotic System. The first such unit opened this summer in Milan, Italy, and a site for a U.S. operation is being evaluated.
The facilities represent new capacity of up to 10 million high-performance tires a year, depending on the final configuration of the plants, Pirelli said.
Bridgestone Corp. also continued to invest in new capacity—buying a second factory in China, budgeting $100 million for expansions and improvements in Brazil, and expanding its still relatively new plants in Aiken, S.C., and Indore, India.
After budgeting at least $400 million in 1999 for new and expanded facilities in North America over a five-year span, Group Michelin turned its sights on Asia.
Chairman Edouard Michelin told shareholders at the firm´s annual general meeting he foresees Michelin becoming the No. 2 tire company in Asia by 2005. To do so, Michelin will have to double its sales in Asia.
It committed, along with a joint venture partner, $100 million to expand capacity in Thailand; budgeted $115 million for a new plant in India; and is in advanced negotiations with Shanghai Tyre & Rubber Co. to create a joint venture in China.
Shanghai reportedly will commit its radial manufacturing resources to the JV and then refocus its own efforts on bias-ply tires. A formal announcement is expected soon.
While Goodyear has a few specific projects under way, a measurable share of its capital spending is directed at integrating Dunlop activities in North America and Europe into its manufacturing and distribution network.
The following is a listing of specific capacity expansion projects monitored by Tire Business in the past 12 months—listed alphabetically, by company name, within specific geographic areas.
*Bridgestone/Firestone Inc. is expanding compounding capacity at its 1-year-old Aiken car and light truck tire facility to reflect a shift in product mix to light truck tires. The firm will invest $24.5 million through mid-2001.
*Cooper Tire & Rubber Co. is spending $34 million to expand capacity for car and light truck tires at its Tupelo, Miss., and Findlay, Ohio, operations by 3.4 million units per year.
*Goodyear may spend up to $100 million at its Gadsden, Ala., plant if market conditions warrant and if governmental authorities pay to demolish old parts of the factory.
*Pirelli Tire North America Inc. is evaluating sites in eastern Sunbelt states for an original equipment-driven modular tire facility.
*Bridgestone/Firestone has budgeted $100 million to invest in its Sao Paulo, Brazil, plant next year.
*Compania Hulera Tornel is expanding capacity at its Mexico City operation by 29 percent to 4,500 units a day, and doubling that of its Tultilan, Mexico, factory to 11,000 units per day. The investment was not disclosed.
*General Tire Mexico has moved to a six-day-per-week operation at its Guadalajara, Mexico, facility and to seven days at its San Luis Potosi, Mexico, plant. Since taking over the former Hulera Euzkadi in late 1998, Continental General Tire has increased daily capacity at Guadalajara by 19.4 percent to 16,950 units, and by 18.3 percent at San Luis Potosi to 11,241 units a day. Both operations make radial and bias-ply passenger, light truck, truck/bus and farm tires.
*Pirelli has secured a $40 million loan from the European Investment Bank to upgrade and expand capacities for passenger, light truck, medium truck and motorcycle tires at its Campinas, Gravatai and Santo Andre, Brazil, factories through 2003.
*Continental A.G. invested $5 million this year in its Semperit Reifen GmbH tire facility in Traiskirchen, Austria, to install two Modular Manufacturing Process production lines.
*Goodyear is investing $28 million at its Philippsburg, Germany, factory to expand annual production of high-performance tires approximately 20 percent to 4 million units this year and then up to 5 million units in 2001. The investment plan coincides with change to a continuous, 21-shift-per-week work plan.
*Marangoni S.p.A. is evaluating sites in Italy and Eastern Europe for a second plant.
*Michelin is investing $48 million in its Vitoria, Spain, facility, primarily for new equipment to expand annual capacity for passenger tires to 10 million units.
*Mitas A.S. is investing $70 million over four years to broaden its product range, adding capacity for off-the-road, agricultural and other lines at its Prague and Zlin, Czech Republic, factories.
*Nokian Tyres P.L.C. has budgeted $35 million to expand production capacity this year at its Nokia, Finland, plant. The investment is part of a five-year plan to expand overall capacity by 50 percent and shift production more toward premium tires.
*Pirelli has plans for five or six MIRS-based operations in the next five yearsÃeach with annual capacities of about 1 million to 2 million unitsÃfor a total investment of about $500 million. The first MIRS production line went on stream in mid-2000 at Pirelli´s headquarters at Bicocca in Milan.
*Trelleborg Wheel Systems S.p.A. plans to invest $14 million at the Trelleborg-Pirelli joint-venture farm tire facility in Tivoli, Italy, to modernize and upgrade manufacturing.
*Apollo Tyres Ltd. has budgeted $150 million for a truck tire plant, the site of which still is being evaluated. The 100-metric-ton-per-day facility should be on stream by 2003.
*Bridgestone ACC India Ltd. is planning to double capacity at its Indore factory to 4 million tires annually by year-end 2001, with about $12 million budgeted during 2000. The expansion plan may include adding bias truck tires to the product mix.
*Bridgestone bought 94.5-percent control of a Kumho Industrial Co. Ltd. tire plant in China for $75 million, and renamed the passenger and light truck tire operation Tianjin Bridgestone Tire Co. Ltd. The facility produces 3.5 million tires a year. The investment included an unspecified amount to upgrade the factory.
*JK Tyre Group is expanding capacity for radial passenger and light truck tires, bias-ply light truck tires and radial truck tires at Banmore, India, at a cost of $21 million.
*Metro Tyres Ltd. has added a $12 million production line at its Ludhiana, India, complex for bicycle tires, devoted exclusively to making tires for export to Europe and the Americas.
*Michelin has narrowed its site choices for a $115 million radial truck tire plant to locations in the western states of Karnataka and Gujarat, India.
*Michelin Siam Group Co. Ltd. will invest nearly $100 million in the coming year to more than double annual capacity for car and light truck tires—to 6.1 million units—at its Laem Chabang, Thailand, factory.
*Nexen Tire Corp. is investing $36 million this year to expand capacity at its Yangsan, South Korea, facility to 10 million tires per year by 2002.
*Tianjin Wanda Tires, a leading Chinese maker of bicycle and scooter tires and tubes, is seeking a joint venture partner to set up production of motorcycle, trailer and light truck tires. Tianjin Wanda projects an investment of $11.8 million for a 30 million-unit-per-year plant.
*Yokohama Rubber Co. Ltd. is expanding daily capacity for radial truck tires at its Mie, Japan, operation to 5,000 units, and will expand an additional 20 percent by early 2002 to 6,000 units to accommodate production from the Hiratsuka City, Japan, factory, where tire manufacturing is being phased out.
*Artawheel Tyre Co. is adding radial capacity for passenger car tires to its 5-year-old car, light truck and truck/bus tire factory in Ardebil, Iran, with technical support from Russia´s TRI Institute. The firm is expanding overall capacity 35 percent to 35,000 metric tons per year short term, with plans to boost this another 43 percent to 50,000 tons. No time frame or investment was divulged.
*Continental is investing $31.4 million at its plant in Port Elizabeth, South Africa, to increase annual production capacity by about a third to more than 4 million units. Annual capacity at the former Gentyre Industries Ltd. operation eventually will rise to 5 million units by 2002, a spokesman said.
*Dunlop Africa Ltd. is spending an unspecified amount to boost capacity at its Ladysmith, South Africa, factory 55 percent to 70,000 units a week to meet increasing export demand. The expansion will include broadening the product range to include 17- and 18-inch performance tires.