ERJ staff report (TB)
Tire Business Staff Report
Tokyo -- Bridgestone Corp. hopes to boost its operating income ratio to 10 percent of sales by 2016 through a series of strategic initiatives, such as expanding â€œstrategicâ€ products, expanding capacities in general and reinforcing â€œfundamental competencies,â€ top management revealed 21 Oct in the firm's Mid-Term Management Plan.
To achieve this improvement - as well as increase the return on assets to 6 percent of sales by 2012 - Bridgestone aims to improve its sales mix, rationalise its operations where feasible and streamline assets, the company said. The company also is committing to spend about $2.75 billion ($2 billion) a year on capital improvements.
Bridgestone's operating income ratio last year was 5.8 percent and is projected to hit 6.2 percent this year. The company is targeting 7.5 percent by 2012 and then improving that by 0.5 percentage points per year through 2016.
Sales should grow about 5 percent a year.
In the tyre sector, which accounts for 83 percent of Bridgestone's annual sales, a key goal will be to increase the revenue per tire through added value and higher value products.
Among the products specified are:
* run-flat, ultra-high-performance (UHP) and winter tyres in the consumer segment;
* expanded Ecopia fuel-efficient technology in both consumer and commercial tyres;
* expanded offerings in the retread business, especially in Asia;
* large and ultra-large radial OTR tyres for construction and mining vehicles; and
* radial tyres for aircraft and motorcycles.
As for â€œfundamental competencies,â€ Bridgestone will launch initiatives to strengthen its competitiveness throughout the supply chain and to leverage the benefits of the company's presence in being both vertically and horizontally integrated.
As for the firm's presence in raw materials, Bridgestone sees an opportunity to develop these assets beyond stable supply for its own uses to profit centres on their own.
Bridgestone also sees opportunities for growth, and profit enhancement, in expanding its captive distribution assets, especially in emerging markets like India and China.
In its non-tyre business sector, Bridgestone is evaluating opportunities for â€œcompeting on a different ground.â€
Bridgestone emphasised it will carry out its initiatives while sticking to the principals of its environmental and social policies, namely being in harmony with nature, recycling and having low carbon usage.
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Article from Tire Business