Cooper to buy Qingdao Ge Rui Da Rubber
Cooper Tyre & Rubber Company announced that it entered into an agreement to purchase a majority of China-based Qingdao Ge Rui Da Rubber Co., Ltd (GRT). Cooper will own 65 % of the entity, which will be renamed Cooper Qingdao Tyre Co., Ltd. (CQT), for approximately $93 million 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 brand tyres for the North American market as well as TBR tyre for Asia and other markets. Passenger car radial (PCR) tyres may also be manufactured at the facility in the future. It is estimated that at full capacity, CQT will be capable of producing approximately 2.5 million to 3 million TBR tyres annually and nearly the same number of PCR tyres within the existing one million-square-foot production facility, with room for further expansion at the location.
GRT is located north of Qingdao in northeast China and currently employs approximately 600 workers. It was established in 2014 after Qingdao Yiyuan Investment Co., Ltd. (QYI) purchased the assets of the then idle facility. QYI’s founder, Executive Director and General Manager is long-time tyre industry veteran Li Zhihua, who is also a professor at Qingdao University of Science and Technology. QYI has established production at GRT with an initial focus on TBR tyres and has put in place an experienced management team backed by a skilled workforce with extensive tyre industry expertise.
“Cooper is excited to take this positive step to secure additional TBR tyre supply and further our Asia growth strategy,” said Brad Hughes, Cooper’s Chief Operating Officer. “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,” Hughes concluded.
“The team at GRT is very impressive with deep industry and technical knowledge,” said Cooper Chairman, Chief Executive Officer and President Roy Armes. “There’s a strong workforce, facilities that we can continue to expand with further capital, and a management team that is focused on the current opportunity in TBR tyres as well as our wider growth plans for Asia. This is a great strategic fit within our existing and highly productive worldwide manufacturing network and will allow us to further optimize our global footprint. We welcome the GRT team to the Cooper family and look forward to many years of success together in the future as CQT.”
Li Zhihua said, “After a lengthy evaluation process to identify the best partner, we are pleased to team up with Cooper, a global tyre industry leader with a 100-year heritage of success. We look forward to working with Cooper to maximize the opportunity we have together to drive continued innovation and expand manufacturing of quality TBR tyres and other products.”
Upon closing, CQT will join seven other tyre manufacturing facilities in the Cooper family of companies with three U.S. plants in Findlay, Ohio; Texarkana, Arkansas and Tupelo, Mississippi, as well as facilities in Kunshan, China; Melksham, England; Krusevac, Serbia and a joint venture plant near Guadalajara, Mexico.