Cooper Tire & Rubber Company to buy a majority of China-based Qingdao Ge Rui da Rubber Co., Ltd. (GRT).
Findlay, Ohio: Cooper Tire & Rubber Company, has
entered in an agreement with China-based Qingdao Ge Rui da Rubber Co., Ltd.
(GRT) and is planning to buy 65% share in the company for around USD93 million.
Post the acquisition, the company will be renamed Cooper Qingdao Tire Co., Ltd.
(CQT). The acquisition is expected to end during the first half of 2016 on account
of certain permits and approvals to be given by the Chinese government.
Qingdao
Ge Rui da Rubber Co., Ltd. (GRT) is located north of Qingdao in northeast China
and has a workforce of around 600 workers. GRT was established in 2014 when an
idle facility was purchased by Qingdao Yiyuan Investment Co., Ltd. (QYI). The
production capacity of the Cooper Qingdao Tire Co., Ltd. (CQT) is anticipated
to be approximately 2.5 million to 3 million truck bus radial (TBR) tyres
annually, at its full capacity. Moreover, the same volume of passenger car
radial (PCR) tyres will be produced within the one-million square-foot
production facility.
According
to Brad Hughes, Cooper’s Chief Operating Officer, “Cooper is excited to take
this positive step to secure additional TBR tire supply and further our Asia
growth strategy. After a comprehensive review of options, we are pleased to
have reached this agreement, which meets our goal of finding a new source of
high quality, cost competitive TBR tyres for North America and Asia. As we have
previously stated, achieving our goals for growth will likely require a series
of actions and today’s announcement is a significant one”
TechSci Research believes that with the acquisition of
Qingdao Ge Rui da Rubber Co., Ltd. (GRT), Cooper Tires will expand its presence
in China, and thereby increasing its penetration in the Asian tyre market. The
newly formed company will act as a source of truck and bus radial (TBR) tyres
for Cooper including the Roadmaster brand for the North American market and TBR
tyres for Asian and other markets.
The
recent report published by TechSci Research, “China Tyre Market Forecast & Opportunities, 2020” rising
automobile production/sales, particularly passenger cars and electric
two-wheelers; as well as high vehicle fleet size, which is amongst the highest
in the world are the key factors driving China tyre market during 2010-2014.
China’s vehicle production in 2014 was in excess of 60 million units. The
country surpassed the United States in the last decade. The country emerged as
the largest automobile market and has sustained its supremacy since then.