ERJ staff report (TB)
Findlay, Ohio -- Cooper Tire & Rubber Co. has offered to buy the assets of a radial car and light truck tyre plant in KruÅ¡evac, Serbia, previously operated by Serbia's Trayal Corp. for approximately $17.4 million.
Cooper expects the deal with Serbian authorities, which is subject to regulatory approvals, confirmatory due diligence and other conditions, to close in the first quarter. Cooper plans to invest about $67 million in the 35-year-old plant, roughly 125 miles south of Belgrade, to upgrade the facility and expand annual capacity to 3 million units within three years. Employment there will grow to 600 to 700 workers from 400 currently, Cooper said.
The operation, to be renamed Cooper Tire Serbia, will complement Cooper's factory in Melksham, England. Cooper called it a â€œlogical next step in the high quality, cost-effective manufacturing footprint underpinning Cooper's strategy of profitable top-line growth.â€
Cooper expects the Serbian government to support the project in several ways, the value of which could reach $13 million if certain goals are achieved.
â€œThe Serbian government is very supportive of this transaction and promoted the benefits of the location, the labor force and the competiveness in the region,â€ said Hal Miller, president of Cooper's International Tire Segment,
â€œAs a global tyre company, developing this well-situated source of quality supply will benefit customers, employees and our shareholders. We are extremely excited about the momentum we are building and the role this operation will play in our future.â€
Cooper dealt with Serbian government entities as Trayal is involved in bankruptcy proceedings, Cooper said.
Cooper did not say what volume of sales it expects the plant to contribute, but did indicate that KruÅ¡evac provides an excellent location to supply tyres to the European and Russian markets.
Trayal, the successor to the tyre and rubber products maker Miloje Zakic, operates a second factory in KruÅ¡evac, making farm, industrial and two-wheeler tyres and tubes.
Bloomberg (US - Ohio)
Toledo Blade (US - Ohio)