Cooper expects JV plant in Vietnam to be producing truck tires by ‘early 2020'

HO CHI MINH CITY, Vietnam — Cooper Tire & Rubber Co.'s joint venture tire plant in Vietnam, A.C.T.R., has started producing trial-run tires less than a year after Cooper and Sailun Vietnam Co. Ltd. agreed to form the venture.

The partners marked the milestone first tire Nov. 18 at a special event held at the facility, Cooper said.

The plant —  located at Sailun's existing site in Phuoc Dong Industrial Park in Tay Ninh Province near Ho Chi Minh City — is expected to be operational and producing tires on a commercial level by early 2020, Cooper said. At full capacity, production is expected to be approximately 2 million truck/bus tires annually.

Cooper and Sailun Vietnam — a subsidiary of China's Sailun Group Co. Ltd. — agreed in mid-December 2018 to form the 35/65 joint venture for producing radial truck and bus tires for global markets. The partners budgeted $220 million to $240 million for the project, split on a pro-rata basis.

"Cooperation between Cooper and Sailun has been outstanding, and we thank our partner Sailun for working so closely with us over the past several months to construct this facility," Cooper Tire President and CEO Brad Hughes said.

"This is another important step in Cooper's strategy to expand and diversify our TBR production globally, giving us additional capacity to supply quality Roadmaster TBR tires to customers worldwide."

Sailun Group Chairman and President Zhongxue Yuan added: "ACTR is a highly modern tire production facility with the latest technologies to drive quality and efficiency. We thank Cooper and all of those involved in the construction of the facility for their excellent support and cooperation. We look forward to many years of successful operation together with Cooper at ACTR."

Being able to source truck tires from Vietnam will help Cooper avoid having to pay the elevated anti-dumping and countervailing import duties imposed by the U.S. in early 2019 on truck tires from China.

Through the first nine months of fiscal 2019, Cooper reported its earnings had been reduced by about $38 million in higher costs related to the U.S. import duties on tires from China.

To compensate for the elevated import duties levied by the U.S. government, Cooper raised prices on its Cooper- and Roadmaster-brand truck tires in April/May to compensate.

The Vietnam joint venture is an extension of Cooper's relationship with Sailun Group, which also involves an offtake production agreement covering production of Cooper's Roadmaster-brand truck/bus tires at Sailun's existing Vietnam plant and Sailun's purchase in late 2018 of a 35% stake in Cooper's Qingdao Ge Rui Da Rubber Co. Ltd. (GRT) joint venture in Qingdao.