Yokohama Signs OTR Supply Agreement with Barrick Gold
Yokohama Rubber announced on January 30 that it has signed a long-term contract with Barrick Gold Corporation for the supply of OTR tyres. Under the terms of the contract, Yokohama Rubber shall deliver approximately 1,300 tyres a year to Barrick for ten years, from 2009 to 2018. To meet this new demand, Yokohama began building the third plant at its Onomichi facility in Japan’s Hiroshima Prefecture in October 2007. The Onomichi plant specialises in the manufacture of OTR tyres and the additions to the facility currently under construction are scheduled to begin operation in January 2009. Yokohama plans to invest approximately 5 billion yen (£23.57 million) into the third plant’s construction.
Headquartered in Toronto, Canada, Barrick Gold Corporation is the world’s largest pure gold mining company, and owns approximately 30 mines around the world. The company is expanding its mining operation to meet a fast growing demand for gold from the decorative and industrial use markets, thus needed a secure tyre supply in the current environment of global shortages.
Only a handful of manufacturers can produce super-large sized OTR tyres, and as one such tyre maker, Yokohama is hastily expanding its production capacity. In February 2006, the company released its plan to increase production capacity at the Onomichi Plant to one and a half 2006 levels by 2009. Volume production of 25-inch tyres at the plant’s second facility began in October 2007, and the production of additional sizes followed. Planned production levels have been upwardly revised to accommodate the long-term supply contract with Barrick and other factors, and the current plan calls for capacity to be 2.2 times that of financial year 2007 levels in financial year 2012.
The tyres that will be delivered to Barrick are for use with 100 to 250 ton class dump trucks that operate mainly in open-pit mines. Yokohama will deliver the products to Barrick’s gold mines around the world directly from the Onomichi Plant.