TOKYO (Sept. 24, 2003) — Bridgestone Corp. estimates the direct and indirect costs of a Sept. 8-9 fire that destroyed the rubber mixing area at its Tochigi tire plant at $357 million.
The losses will result in a $45 million, or 3.4 percent, drop in 2003 operating income, although the weakening yen and strong exports will largely offset the costs, the company said.
Half of the $357 million will be lost sales from the plant, which makes passenger, light truck and medium truck/bus tires, Bridgestone said.
The fire caused $26.8 million in direct costs — value of the building, equipment and inventories and clean-up — and Bridgestone said it would invest nearly $90 million to rebuild and equip the mixing department, which should be operational by September 2004. Insurance should cover about $35.7 million of the costs, Bridgestone said.
The plant is operating at about 20 percent of its 22,000 units-per-day capacity. Management expects output to increase to between 60 and 70 percent of capacity by year-end. Earlier this year, Bridgestone had announced investments to raise radial truck tire capacity at Tochigi.