Cooper to acquire stake in Mexican tire plant

Tire Business staff report

Fondlay, Ohio-- Cooper Tire & Rubber Co. is investing $31 million and taking a minority ownership in a tyre manufacturing plant in Guadalajara, Mexico.

The facility will be jointly owned by Cooper, IBSA (a Mexican holding corporation) and Cooperativa TRADOC S.R.L., the employee owners of the Corporación de Occidente facility. Cooper will hold a 38 percent share in the facility.

“This is is an important step in the implementation of our strategic plan and our access to cost-competitive sourcing,” said Cooper Chairman, President and CEO Roy Armes. “Securing access to a steady source of supply to supplement the production of our US facilities and meeting the customer's demands in the North American market is critical to our success. Further, this will help us facilitate penetration in the Mexico market with our Cooper brand.”

Corporación de Occidente is the second-largest tyre plant in Mexico and currently produces 2.4 million passenger radial tyres per year, Cooper said. Expansion plans already are in place to boost that capacity to an estimated 4.6 million by year-end 2010, and to 6.0 million units during 2011. The plant employs 700.

Jose Antonio Suárez Hernández, executive director of Corporación de Occidente, described Cooper as a “world class partner” and said the long-term agreement will allow important synergies that will take the plant to a high efficiency level and the ability to become a quality producer for the world market.

In October 2007, Cooper announced a 50-50 joint venture to form a trading company with Nemet International, SA de CV, which is responsible for the marketing, sales and distribution of the Cooper and Pneustone brands in Mexico. This trading company will continue to operate as a separate entity, Cooper said.

From Tire Business (A Crain publication)