ERJ staff report (TB)
Findlay, Ohio -- Cooper Tire & Rubber Co. plans to boost capital spending this year by as much as 35 percent to support growth initiatives such as ramping up the former Trayal Corp. plant in Serbia and implementing an enterprise resource planning (ERP) system.
Cooper plans capital expenditures this year of $180 million to $210 million this year, up from $155 million invested in 2011 and $120 million in 2009.
Noting this is higher than Cooper's traditional capital spending, Cooper CEO Roy Armes said the company believes is is â€œappropriate relative to the strength of our balance sheet and the growth of our business.â€
Armes said Cooper anticipates matching last year's first quarter operating profit performance - $32 million, or 3.5 percent of sales - this year despite costs of as much as $30 million to cover measures taken to â€œprotect the supply of tyres to our customersâ€ during the worker lockout at Cooper's Findlay plant throughout most of the past three months.
Armes did not offer a full fiscal year 2012 outlook, but did say Cooper continues to believe that â€œpent-up demand for broadline tyres exists, although it is difficult to predict exactly when that demand will manifest.â€ Armes also said focusing on delivering products â€œthat meet ever-changing consumer needs should help to balance our exposure to broadline tyres and economic conditions.â€
Cooper bought the assets of the former Trayal plant in KruÅ¡evac, Serbia, in January for $17 million and has budgeted about $67 million over three years to upgrade the plant - renamed Cooper Tire Serbia - to expand capacity at the idled facility to 3 million units annually.
From Tire Business (A Crain publication)