* Ohio - Tire makers' capital spending eases; Asia still tops
-- After several years of steadily increasing investment in new factories and expanded capacity, the world’s leading tire makers eased back on the cap-ex accelerator over the past year, committing more than $6 billion to new projects in the 12 months through mid-August... This is the lowest 12-month amount tracked by Tire Business since 2008-09 but is essentially equal to the 10-year running average. The actual number is likely closer to $7 billion, however, as a number of companies did not disclose their investments... Roughly two-thirds of the investment spending on specific projects disclosed in the past year was targeted at plants in Asia, the research shows, in particular China and Thailand... The investments announced in the past year include a dozen new factories. Combined, the projects tracked by Tire Business represent 66 million units of new annual passenger/light truck tire capacity, at least 9 million units of new truck/bus tire capacity and up to 5 million units of new capacity for other types of tires... This contrasts with just three plant closings announced by major manufacturers in the past year: Apollo Tyres Ltd. in Durban, South Africa, (truck and OTR tire plant, 600 workers); Group Michelin in Budapest, Hungary (radial truck tire plant; 500+ employees affected) and Joue-les-Tours, France (radial truck tires, 8,000 units/day, phased out)... In addition, Michelin phased out all but a few select high-performance tire lines at its Pictou, Nova Scotia, plant... Yokohama Rubber Co. Ltd. led the league this year with a capital expenditure announcement of $1 billion, although that’s spread out over five years and multiple factories... Goodyear ($635 million), Kenda Rubber Industrial Co. Ltd. ($500 million) and Apollo Tyres Ltd. ($425 million) are next on the spending list... In terms of capital spending by fiscal year, the largest firms tracked by Tire Business devoted on average 7.2 percent of sales on capital improvements last year, down nearly one full percentage point from fiscal 2013...
(Photos courtesy of Alliance Tire Group; Federal Corp.; Stephen Downer; and Thai Investment) -- Akron, OH, USA - Tire Business, by BRUCE DAVIS - 8 Sept 2015
Labels: tires makers news worldwide
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