Tokyo – Bridgestone Corp. is selling its synthetic rubber production business in China to Taipei-based materials and chemicals supplier LCY Corp., in line with the group's mid-term (2021-2023) business plan to ‘rebuild earning power’.
As part of the deal, the Japanese manufacturer will sell all shares of Bridgestone (Huizhou) Synthetic Rubber Co. Ltd (BSRC) to LCY Chemical Corp. by 14 Dec, said a 15 June statement.
BSRC has one synthetic rubber production plant in Huizhou, Guangdong Province and posted sales of Yuan399 million (€51 million) in 2020.
Operational since late 2008, the plant manufactures 50 kilotonnes per annum of styrene butadiene rubber, and supplies to Bridgestone's tire production factories in China.
Through the sale, Bridgestone expects BSRC to “make new synergy with LCY” and maximise growth, given the Taiwanese company’s “excellent expertise for materials and chemicals business.”
Bridgestone said the move is part of its mid-term business plan which will see the Tokyo-based group enhancing the earning power of its core tire business through cost-cutting and restructuring measures.
The synthetic rubber plant was originally built as part of the group’s vertical integration strategy to enable it to have “internal manufacturing of raw materials.”
Under the recent ‘volatile and uncertain’ business environment, however, Bridgestone said it believed that the sale would help optimise its tire business while offering BSRC an opportunity for ‘sustainable growth.’
Bridgestone unveiled its mid-term business plan in February, contributing to a bigger 10-year strategy to evolve into a "sustainable solutions company."
As part of this, the group said it expects to announce further business portfolio and manufacturing footprint restructuring to stakeholders “at the appropriate timing.”