Cooper Tire Acquires Major Stake in Chinese Truck Tire Manufacturer

Cooper sold its stake in its joint venture Cooper Chengshan (Shangdong) Tire Company Ltd to its partner, Chengshan Group Co Ltd in 2014 after differences arose between the two companies in the wake of the Apollo bid for Cooper. At that time, Cooper’s CEO and president, Roy Armes had said that the company would continue to maintain and expand its presence in Asia by identifying new alternatives for the tires that used to be manufactured at the Cooper Chengshan plant. Now the renowned tire company has identified Ge Rui Da Rubber Co., Ltd (GRT) as a possible alternative and announced that Cooper will be acquiring a major stake in the Chinese truck tire manufacturer.

Cooper will be investing USD 93 million for a 65 per cent stake in the new joint venture company, Cooper Qingdao Tire Co. (CQT). The transaction is likely to be finalized within the first half of 2016, pending formal approvals and permits from the Chinese government.

The joint venture company will be engaged in the production of Roadmaster brand tires for the Asian market, the North American market and for other markets as well and will serve as a manufacturing hub for truck and bus radial tires for Cooper on a global basis. The plant which covers an area of one million square foot has an annual production capacity of 2.5 million to 3 million TBR tires. Cooper also has plans to produce passenger car tires at the plant at a future date as it has plenty of space for future expansion.

Located north of Qingdao in northeast China, the GRT factory currently has 600 employees. The plant was set up in 2014 when Qingdao Yiyuan Investment Co., Ltd. (QYI) which is headed by tire industry veteran, Li Zhihua, bought the assets of an idle facility. Zhihua is also a professor at Qingdao University of Science and Technology and recruited a highly experienced and capable management team.

Speaking about the acquisition, Brad Hughes, Cooper’s chief operating officer said, “Cooper is excited to take this positive step to secure additional TBR tire supply and further our Asia growth strategy. He added that the factory will function as Cooper’s new source of high quality, cost competitive TBR tires for North America and Asia.

Roy Armes said the Cooper management was highly impressed by the GRT team’s deep industry and technical knowledge, its strong workforce, and facilities which offer high scope for further expansion. He added, “This is a great strategic fit within our existing and highly productive worldwide manufacturing network and will allow us to further optimise 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 added: “After a lengthy evaluation process to identify the best partner, we are pleased to team up with Cooper, a global tire 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.”

With the addition of the new company, Cooper will have eight tire manufacturing facilities spread across the world including three factories in the United States (Findlay, Ohio; Texarkana, Arkansas and Tupelo, Mississippi), the Kunshan plant and CQT in China, the Melksham plant in UK (Melksham), Krusevec factory in Serbia and a joint venture plant in Mexico (near Guadalajara).