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Bridgestone 1.2 bil investment

(Editor's Note: This story is part of our #TireBiz30 in which we feature one archived story every day of September to celebrate Tire Business' 30th anniversary. Each story represents one of the most relevant news story published in our pages for that year.)

NASHVILLE — Bridgestone Americas will invest more than $1.2 billion in the coming two to three years to build a radial OTR tire plant in Aiken County, S.C., expand capacity at its existing Aiken consumer tire plant and expand a steel cord factory in Clarksville, Tenn.

The bulk of the investment, about $970 million, will be for the 1.5 million-sq.-ft. OTR tire plant, which is scheduled to begin production by the end of the first quarter of 2014 with 330 new employees. Capacity eventually will ramp up to 130 metric tons a day by 2020, by which time employment will have expanded to 550, Bridgestone said.

This will be Bridgestone's third plant worldwide for large and ultra-large OTR tires. The firm's others are in Shimonoseki and Kitakyushu, Japan; the new plant will be similar in size to the Kitakyushu plant, where Bridgestone has budgeted nearly $1 billion in investments over the past several years.

Bridgestone Americas President Gary Garfield said the investment will enhance Bridgestone's supply systems, improve its sourcing flexibility and strengthen its position as a leading competitor in the radial OTR tire segment.

Separately, Bridgestone Corp. said the decision to build was made in response to strong global demand for these products, particularly from the Americas, as well as to enable Bridgestone to have "multiple options for possible future expansions, which will improve its flexibility in responding to changes in the operating environment."

The plant, to be built on a 545-acre site in Graniteville's Sage Mill Industrial Park, will be designed with a focus on the environment, Bridgestone said. The company plans to achieve LEED Construction Certification by incorporating state-of-the-art technology in its facility and equipment design.

Bridgestone named Steve Brooks, vice president, information technology and a 22-year company employee, as chief project officer to oversee the construction and start-up of the plant. Mr. Brooks previously was the Aiken consumer tire plant manager.

Bridgestone said it picked Aiken over other potential sites because of its "proven track record" of building world-class tires in Aiken County, a good workforce there and a "competitive environment" for business there.

The South Carolina Department of Commerce is providing $15.5 million in grants to the company for infrastructure and site preparation, including $6 million to improve public roads around the facility. Aiken County purchased the land for about $10.5 million and will offer some infrastructure credits.

Bridgestone also produces small-sized OTR tires at a plant in Bloomington, Ill. The new plant will produce tires ranging in size from 49 to 63 inches in rim diameter.

The existing site in Bloomington was not "suitable" for the size facility Bridgestone envisioned for the large OTR tires. Bloomington builds primarily bias-ply OTR tires.

The second part of the investment, about $230 million, will be to expand capacity for passenger and light truck tires at the Aiken plant by 8,000 tires a day, or nearly 29 percent beyond the projected capacity the firm had targeted with a $135 million expansion project announced just two months ago.

The expansion disclosed Sept. 21 will add 740,000 square feet of manufacturing space to the 12-year-old plant, bringing the total under roof to 2.74 million square feet, and create more than 300 full time and contractor jobs in Aiken County when fully on stream, which should happen by 2015.

Bridgestone cited "growing future projected demand in key market segments," including UHP and light truck/SUV tires, for its decision to ramp up the scale of the plant's expansion just months after announcing the initial project.

Installing more advanced tire-building machines will provide additional versatility, Bridgestone said, which will yield greater flexibility and speed in responding to shifts in market demand.

The plant's annual capacity will rise 50 percent by 2015 over its current configuration to 13.4 million units, Bridgestone said.

Construction of both phases of the plant's expansion is planned to begin in November and be completed by the first quarter of 2013, Bridgestone said.

Separately, Bridgestone is committing $75 million to expand capacity for OTR-tire-grade steel cord at its Bridgestone Metalpha U.S.A. Inc. plant in Clarksville and an undisclosed amount to upgrade a steel-cord plant in Saga, Japan.

The Clarksville project will increase daily output there by 10 percent and add 123,077 square feet to the plant. Capacity at the 15-year-old plant is 165 metric tons per day, Bridgestone said.

The expansion, which ties into the construction of the OTR tire plant in Aiken County, will create 36 new jobs when the expanded capacity comes on stream by late 2015.

South Carolina Gov. Nikki Haley called the investment the largest single corporate investment in state history.

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