Nashville, Tennessee - Bridgestone Firestone Chile SA will close its multipurpose tyre plant in Coquimbo, Chile, by year-end, citing "intense competition" from low-cost producers and the plant's outdated product mix.
"We have a difficult challenge in Coquimbo," said John Jenkins, president of Bridgestone Firestone Chile. "The reality is that as market conditions erode for low-end or Â´mass-marketÂ´ tyres, the plant, which for several years hasnÂ´t generated a reasonable return on assets, is now projected to begin losing a significant amount of money. New capital investment will not reverse the market forces that have created the competitive obstacles we are facing."
The Chilean subsidiary of Bridgestone Americas Holding Inc. will maintain a sales office in Santiago, Chile, in order to continue supporting its dealers in Chile, Bolivia and Peru. BFS Chile will in the future source tyres for the markets it services from other company plants in Latin America.
The Coquimbo plant, which began operations in 1975, was purchased by BFS Chile in 1999. It produces radial and cross-ply passenger and light truck, truck and bus, and off-the-road tyres. More than 70 percent of the tyres made at the plant are in the low-end, shrinking, "mass market" segment and include cross-ply tyres that are unique to this market. The facility employs more than 470.
Jenkins said BFS Chile will carry out the closing "in full accordance with Chilean labour law...We have contacted local government leadership, the union and the community to explain our decision as well."
The company did not disclose what costs it anticipates from the closing.
From Rubber & Plastics News (A Crain publication)