Details of Bridgestone’s ‘major strategic investment’ announced
A total of around US$1.2 billion dollars will be invested in Bridgestone’s Aiken County site in the United States. The tyre maker’s plans for this South Carolina location involve both increasing capacity at its passenger car and light truck tyre plant and erecting a new factory to produce large and ultra-large radials for construction and mining vehicles. Production capacity at Bridgestone’s steel cord plant in Clarksville, Tennessee will also be increased in order to supply this new OTR tyre facility.
“The announcement of this greenfield off-road radial tyre plant is a major strategic investment by the global Bridgestone Group to enhance its supply systems, improve its sourcing flexibility and further strengthen the Bridgestone Group’s position as the global leader in the off-road radial tyre segment,” stated Gary Garfield, vice-president and senior officer, Bridgestone Corporation, and CEO and President, Bridgestone Americas, upon unveiling details of the tyre maker’s investment plans.
Bridgestone notes that construction of a new OTR tyre plant is “consistent with the company’s global sourcing strategy” and will meet steadily increasing demand for off-road radials. The planned 1.5 million square foot (140,000 square metre) factory is to be located at Sage Mill Industrial Park in Aiken County and will be the first Bridgestone facility outside Japan to produce large and ultra-large OTR tyres. The decision to establish such a facility in the US was taken as Bridgestone believes it will lead to supply systems improvements, thereby helping it respond to customer needs and growing global demand more effectively. The presence of a large and ultra-large OTR tyre factory outside of Japan is also expected to give the tyre maker “multiple options for possible further future expansions” that should improve its ability to rapidly respond to changes in the operating environment and customer requirements.
All up, the new plant will cost $970 million. This level of investment will provide Bridgestone with a facility capable of producing 39.5 tons per day of 49 to 63-inch OTR tyres in its first phase and around 130 tons of tyres per day when fully operational. Installation of manufacturing equipment for the factory’s first phase will begin in the fourth quarter of 2012 and production is expected to commence in the first half of 2014. Full phase one production is anticipated by the end of 2015 and completion of the total project is scheduled for the first half of 2020. The project’s first phase will create more than 330 full-time and contractor jobs; a projected workforce of around 550 full-time employees and contractors will be needed to operate the plant when it is fully completed.
PCR/LTR plant expansion
The most recent plan to increase capacity at Bridgestone’s existing passenger car and light truck tyre plant in Aiken County was only announced in July (a capacity increase of approximately 4,750 tyres per day) yet Bridgestone notes that demand continues to grow in key market segments, including the ultra high performance and light truck/SUV tyres. To meet this still-rising demand, capacity at the Aiken County plant will receive a further boost. The tyre maker will invest $211 million to add an additional 8,000 tyres per day, giving the facility a total daily capacity of 37,750 tyres – 13.4 million tyres a year – by the third quarter of 2015. Bridgestone will increase the factory’s size by 266,000 square feet (25,000 square metres); together with July’s $135 million announcement, factory area should grow by 740,000 square feet to 2.74 million square feet (255,000 square metres).
A key part of the latest expansion project is the installation of new, more advanced tyre building machinery that Bridgestone says will provide the plant with an “additional level of versatility” and will give it “even greater flexibility and speed in responding to shifts in market demand.” Over the long term, this versatility and flexibility is expected to help the company address customer needs by improving the fill rates of the tyres produced in Aiken County. Construction of both expansion phases will begin in November 2011 and should be completed in the first quarter of 2013. Should the project be executed according to schedule, the first production tyre will be manufactured in the expansion areas during the third quarter of 2013. More than 300 new full-time and contractor jobs will be created by the time both expansion projects are fully completed in 2015.