Tyre industry investing nearly $10 000 million worldwide
By Bruce Davis, Tire Business staff
Akron, Ohio -- Despite the uncertain market prospects for the near future, the global tyre industry has committed a staggering $9600 million (Euro 6600 million) in the past year toward capital expenditures for new plants, expanded capacity and modernisation projects.
This sum is three times that tracked in the 2006-2007 period and the largest 12-month total ever tracked in the 22-year history of ERJ's Global Tyre Report.
More than half the total-nearly $5600 million-comes from just two companies, Group Michelin and Goodyear.
The total includes $2200 million for 10 new plants and the rest for expansions/modernisations. The new plants represent more than 15 million units of new annual capacity.
Roughly $4300 million of the $9400 million total is earmarked for Europe, with $1500 million budgeted for projects in North America, $2400 million going to Asia, and $600 million to Latin America.
Globally, tyre makers opened seven new tyre plants in the past 12 months, representing 52,000 units units of daily capacity and $000 million in investments. In addition, six plants representing 40,000 units are scheduled to come on stream in the next 12 months.
At the same time, five tyre plants were closed during the same time period.
During fiscal 2007, Bridgestone topped the capital spending table with $2300 million in investments, although Hankook Tire Co. Ltd., Nexen Tire Corp. and Nokian Tyres P.L.C. were out front in spending intensity, devoting 18.7, 15.9 and 11.4 percent of sales, respectively, to investments. Bridgestone's spending represented 8 percent of sales.
On average, the top dozen or so tyre makers devoted 7.1 percent of sales revenue toward capital expenditures, up from 6.7 percent in 2006.
In terms of research and development, the top tyre makers devoted 3 percent of sales to their research and development budgets in 2007, unchanged from 2006.
Michelin was the biggest spender, in terms of tyre-related R&D, at $781 million, or 3.4 percent of sales.
From Tire Business (A Crain publication)
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