Cooper Tires to buy majority of Qingdao Ge Rui Da Rubber
Cooper Tire says it has entered into an agreement to purchase a majority of China-based, Qingdao Ge Rui Da Rubber (GRT).
The US supplier will own 65% of the business, which will be renamed Cooper Qingdao Tire (CQT), for around RMB600m (US$93m), including the acquisition and initial investments in the operation.
The transaction is expected to close during the first half of 2016, pending certain permits and approvals by the Chinese government.
CQT is expected to serve as a global source of truck and bus radial (TBR) tyre production for Cooper including Roadmaster brands for the North American market as well as TBR variants for Asia and other markets.
Passenger car radial (PCR) tyres may also be manufactured at the facility in the future.
It is estimated at full capacity, CQT will be capable of producing around 2.5m to 3m TBR tyres annually and nearly the same number of PCR versions within the existing 1 million square-foot production facility, with room for further expansion.
GRT is located north of Qingdao in North-East China and currently employs around 600 workers. It was established in 2014 after Qingdao Yiyuan Investment (QYI) purchased the assets of the then idle facility.
"Cooper is excited to take this positive step to secure additional TBR tyre supply and further our Asia growth strategy," said Cooper COO, Brad Hughes.
"After a comprehensive review of options, we are pleased to have reached this agreement, which meets our goal of finding a new source of high quality, cost competitive TBR tyres for North America and Asia.
"As we have previously stated, achieving our goals for growth will likely require a series of actions and today's announcement is certainly a significant one."
On closing, CQT will join seven other tyre manufacturing facilities in the Cooper family of companies with three US plants in Findlay, Ohio; Texarkana, Arkansas and Tupelo, Mississippi, as well as facilities in Kunshan, China; Melksham, UK; Krusevac, Serbia and a joint venture plant near Guadalajara, Mexico.