Bridgestone Invests in Globally Integrated Supply Chain

---

Researched by Industrial Info Resources (Sugar Land, Texas). New plants will come into production by 2008 to support tire-maker Bridgestone Corporation’s (TSE:5108) (Tokyo, Japan) strategy of global expansion of in-house production capacity in raw materials and feedstock for tires and diversified products. Bridgestone will utilize its subsidiaries and those locations to accomplish this goal.

High-quality carbon black will be produced by the Mexican subsidiary, Mexico Carbon Manufacturing. The company is investing $81 million in a new plant. When it comes online in 2008, the annual production capacity of the plant of 35,000 tons of carbon black will assist in meeting increasingly high demand due to the expansion of the company’s tire plants worldwide. The company also has carbon black production facilities in Japan and Thailand.

Another subsidiary, Bridgestone Neumaticos de Monterrey (BFMX), started construction in 2005 on a $220 million plant in Monterrey, Mexico for a new tire manufacturing plant that will be the first outside Japan to use the new ‘BIRD” (Bridgestone Innovative and Rational Development) tire production system that completely automates all stages of tire manufacturing from the initial processing of materials to the final inspection of the finished product.

The plant will have a production capacity of 8,000 tires a day, which will be primarily aimed at the high-performance, ultra high-performance, large rim diameter passenger and light truck tire markets in North America. This will be the company’s third tire manufacturing plant in Mexico. In 2005, Mexico’s tire industry exported $215.9 million of tires and tubes to the U.S., which is an increase of 27.5% over the previous year.

At the end of 2005, Bridgestone (Huizhou) Synthetic Rubber Company announced an investment of $100 million to construct a synthetic rubber plant in China’s Guandong Province to meet the demand for the product in tire production. Annual production of 50,000 tons of styrene-butadiene rubber will be used to supply the company’s tire plants in China and other Asian regions. Bridgestone signed a licensing agreement with JSR Corporation for the technology used in the production of advanced performance synthetic rubber. The group currently produces synthetic rubber at two plants in the U.S.

A global boom in mining, quarrying and major construction projects has put pressure on the availability of large and ultra-large tires and has spawned urban legends, in regions like the Alberta oil sands, about midnight tire piracy and overgrown men begging and sobbing for a re-tread. Bridgestone is increasing production capacity for the large and ultra-large radial tires for mining and construction equipment plus other off-road equipment.

Approximately $155 million is being invested in expanding three plants in the U.S. Capacity at the Shimonseki plant will be expanded by 20% by 2008. Steel cord production will go up 5% at Saga and Hofu plants for tire parts. The integrated supply chain will be completed in phases between the end of 2006 and the beginning of 2008. Looking ahead the commercial and industrial tire markets are seen to be strong growth markets for tire manufacturers.

Bridgestone’s profile will receive a public boost in 2007, when they will be the sole provider of racing tires for the F1 Grand Prix circuit. Michelin has pulled out for the year and decisions will be made on a sole provider for F1 from 2008 onwards.

Bridgestone is the world’s largest manufacturer of tires and other rubber products, which account for 80% of the group’s worldwide sales. The company also manufactures industrial rubber and chemical products, sporting goods and other diversified products with sales in more than 150 countries.

View Project Report - 65000510

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.