FINDLAY, Ohio — Cooper Tire & Rubber Co. is expanding its presence in Mexico, striking a deal to partner in a capacity expansion project at that country’s second largest tire plant.
In the deal, Cooper will invest $31 million for a 38 percent stake in the project, which will increase production capacity at the Corporacion de Occidente passenger radial plant in Guadalajara.
Cooper already has a business relationship with Corporacion de Occidente, having formed a 50/50 joint sales and marketing venture with the employee-owned firm in October 2007 to handle Cooper and Pneustone brands in that country.
Cooper said that trading operation will continue to operate separately, but the new investment deal will replace an existing off-take production agreement between Cooper and Corporacion de Occidente.
Corporacion de Occidente currently produces 2.4 million passenger radial tires per year. The planned expansion brings that capacity to an estimated 4.6 million by year-end 2010, and 6 million units during 2011.
“This is an important step in the implementation of our strategic plan and our access to cost- competitive sourcing,” said Roy Armes, Cooper’s chairman, president and CEO. “Securing access to a steady source of supply to supplement the production of our U.S. facilities and meeting the customer’s demands in the North American market is critical to our success. Further, this will help us facilitate penetration in the Mexico market with our Cooper brand.” (Courtesy of Tire Review)
